Elementis plc

Annual Report and Accounts 2023

Elementis plc Annual Report and Accounts 2023

Elementis is a global specialty

chemicals company.

We offer performance driven additives

that help create innovative formulations

for consumer and industrial applications.

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.

Read more about how our purpose guides our strategy, culture and values on

pages 6, 45-50 and 82.

Our purpose

Unique chemistry, sustainable solutions

Cautionary statement

The Annual Report and Accounts for the financial year ended 31 December 2023, 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.

Total recordable injury rate

0.33

2022: 0.67

Environmental incidents

2022: 0

Scope 1 and 2 GHG emissions

63 kt CO

2022: 67 kt CO

Revenue

$713.4m

2022: $736.4m

Adjusted operating profit

$103.9m

2022: $100.5m

Adjusted operating margin

14.6%

2022: 13.6%

Operating profit/(loss)

$58.9m

2022: $(41.8)m

Profit/(loss) before tax

$39.7m

2022: $(54.8)m

Diluted earnings/(loss) per share

4.7c

2022: (10.7)c

Adjusted diluted earnings per share

10.8c

2022: 10.9c

Dividend per share

2.1c

2022: 0.0c

Strategic Report

2 Elementis at a glance

4 Chair’s statement

6 The foundation of Elementis

7 Our business model

10 Chief Executive Officer’s review

13 Investment case

14 Our market environment

16 Strategic progress

24 Key performance indicators

26 Stakeholder engagement

28 Section 172

29 Sustainability

33 Materiality and strategy

34 Climate

42 Environment

45 People

51 Responsible business

54 Non-financial information statement

55 Finance report

60 Operating review

63 Risk management

67 Principal risks and uncertainties

72 Viability and going concern statement

Corporate Governance

73 Chair’s introduction to governance

74 Board of Directors

77 Division of responsibilities

78 Board and engagement highlights

79 Board in action

80 Workforce engagement

82 Purpose, culture and values

83 Board evaluation

84 Nomination Committee report

87 Diversity

88 Audit Committee report

92 Compliance statement

96 Directors’ Remuneration report

123 Directors’ report

126 Directors’ responsibilities

Financial Statements

127 Independent auditor’s report

135 Consolidated income statement

136 Consolidated statement of

comprehensive income

137 Consolidated balance sheet

138 Consolidated statement

of changes in equity

139 Consolidated cash flow statement

140 Notes to the consolidated

financial statements

183 Company balance sheet

184 Company statement of

changes in equity

185 Notes to the company financial

statements of Elementis plc

Shareholder Information

190 Alternative performance measures

and unaudited information

192 Five year record

193 Shareholder services

194 Corporate information

195 GRI index

197 SASB index

198 Glossary

Contents

1 Refer to explanations and definitions, including alternative performance measures, on pages 24-25 and 190-191.

Operational highlights

Financial highlights

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Global footprint

What we do

Our products don’t have everyday names, but there is a little bit of Elementis in many everyday

items. We create specialty chemicals that deliver crucial end product attributes across a range

of industries. Innovation is at the heart of what we do: our focus is on creating solutions that

deliver performance improvements and enhanced sustainability credentials.

Elementis at a glance

Key

Office

Laboratory

Manufacturing

1,281

employees

locations worldwide

FTSE 250

constituent

Two

focused businesses

1 Cologne, Germany office closing end of 2024.

2 Porto, Portugal office opening in H1 2024.

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

Asia

20%

of Group

revenues

33%

of employees

offices

Americas

38%

of Group

revenues

31%

of employees

offices

Europe

42%

of Group

revenues

36%

of employees

offices

Elementis plc

Annual Report and Accounts 2023

Our businesses

Skin care

We offer a broad selection of natural and

naturally-derived ingredients, facilitating

the development of natural skincare

products, while providing exceptional

texture, great sensory properties and

long-lasting stability.

Antiperspirants

Leader in antiperspirant actives,

we cater to consumer needs with

effective and sustainable solutions.

Our customers value our supply resilience

driven by our global production footprint.

We are the leading industry innovators,

responding to consumer trends for

high-performance actives that ensure

long-lasting sweat and odour protection.

Colour cosmetics

As the market leader in oil-based

rheology modification, we offer

a wide range of solutions and

technologies that help formulate

make-up products with vibrant colour

and excellent sensory properties.

Coatings

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 more evenly.

Talc

We are the second largest global

supplier of talc-based additives.

We use proprietary flotation technology,

which produces consistent talc purity

and allows customisation. Our talc makes

long life plastics stronger and lighter,

gasoline particulate filters work,

and food packaging recyclable.

Revenue

$209m

% of Group operating profit

42%

Segment operating margin

24%

Revenue

$504m

% of Group operating profit

58%

Segment operating margin

14%

Key markets and our positioning

Colour cosmetic and skin

care rheology leader; global

antiperspirant actives leader

Key markets and our positioning

Deco and industrial coatings;

auto plastics; global rheology

additives leader; leading talc player

Competitive advantage

Innovation and

formulation

leadership

Customised

rheology

modifiers

Active

ingredients

High-quality

hectorite

resource

Global

reach

Competitive advantage

Innovation and

formulation

leadership

Rheology

modifiers

and additives

High-quality

hectorite

resource

High

performance

talc

Read more about Personal Care on pages 16-23 and 60-61.

Read more about Coatings and Talc on pages 16-23 and 61-62.

Performance Specialties

Personal Care

1 Pre central costs. Refer to alternative performance measures definitions on pages 190-191.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Introduction

The 2023 financial year has been

challenging for our sector, with prolonged

destocking by our customers across

both the industrial and personal care

segments. Against this backdrop,

Elementis demonstrated the resilience

of its integrated business model,

delivering both profit growth and margin

improvement. This also included a marked

improvement in the Talc business under

new leadership, which has further potential

for improvement in the near term.

Balance sheet and

shareholder returns

The Group made further progress in

2023 on strengthening the balance sheet.

Net debt fell to $202 million at year end,

helped by the proceeds from the sale of

our Chromium business earlier in the year.

Net debt, along with the higher earnings,

resulted in the net debt to EBITDA ratio

reducing to 1.4x (2022: 2.2x).

Considering this and also taking into

account the promising near-term

prospects for the business, the Board

is recommending a reinstatement of the

ordinary dividend to an amount of 2.1 cents

per share to shareholders at the upcoming

Annual General Meeting (“AGM”).

The final dividend will be paid on 31 May

2024 in pounds sterling at an exchange

rate of £1.00:$1.2705 (equivalent to

a sterling amount of 1.65 pence per

share) to shareholders on the register

at 3 May 2024.

Our updated Dividend Policy is intended

to provide a reliable annual return to our

shareholders. We will seek to maintain

balance sheet flexibility and strength,

in line with the Group’s capital allocation

framework, outlined in our recent Capital

Markets Day (“CMD”) presentation.

Elementis is a highly cash generative

business, so as leverage further reduces,

we will consider returns of excess capital

to our shareholders.

Strategic priorities and

new financial targets

Following the sale of Chromium, Elementis

has been transformed into a higher-quality

business, with strong market position in

attractive and structural growth segments.

Our strategy, as confirmed recently, is built

on the three pillars of Innovation, Growth

and Efficiency, underpinned by our

sustainability objectives. I am confident

that this will support our growth objectives

over the coming years. In addition,

we have set out updated 2026 targets

for adjusted operating margin of 19%+,

three-year average operating cash

conversion of at least 90%, and added

a new target for return on capital employed

(excluding goodwill) of over 20%. These

are ambitious targets which require both

detailed planning and relentless focus on

our core business and execution. Your

Board is fully committed to their delivery.

The plans include new efficiency and

growth programmes, which were

presented to investors by the members

of the Executive Leadership Team (“ELT”),

at our CMD in November. The efficiency

programmes aim to deliver $30 million

of annual savings by 2025, through

organisational restructuring, and further

operational and procurement savings.

John O’Higgins

Chair

“ Elementis delivered

a resilient performance

in 2023, in a continued

challenging demand

environment. These

results reflect the

commitment and hard

work of all our people

and their relentless

customer focus,

underpinned by our

specialist high-value

product offering.”

Chair’s

statement

Elementis plc

Annual Report and Accounts 2023

The Board of Directors confirms that

during the year ended 31 December

2023, it has acted to promote the

long term success of Elementis for the

benefit of its shareholders, whilst having

due regard to the matters set out in

section 172(1) of the Companies Act

2006, being:

(a) the likely consequences of

any decision in the long term;

(b) the interests of the Company’s

employees;

business relationships with

suppliers, customers and others;

(d) the impact of the Company’s

operations on the community

and the environment;

(e) the desirability of the Company

maintaining a reputation for high

standards of business conduct; and

(f) the need to act fairly between

members of the Company.

Throughout the year, the Board

discussed its obligations, including

how stakeholder engagement is

incorporated into our long term

decision making. The Board regularly

discusses progress against strategic

priorities, focusing on the long term

strategic direction of Elementis.

As part of these discussions, the

Board considered relevant market

and industry trends and their potential

impact on our stakeholders.

Details of the Board’s engagement

with key stakeholders and key decisions

taken over the year are included on

pages 26-28.

Further details of the Board’s activities

are described in the Governance Report

on pages 78-81.

Section 172 statement

The top-line growth programme covers

seven growth platforms across Personal

Care and Performance Specialties. It

targets a delivery of $90 million of above

market revenue by 2026 and is an integral

part of the margin improvement target.

We made good progress in 2023 on our

sustainability objectives, further reducing

emissions across our operations and in

our supply chain. Our ongoing work to

identify the risks and opportunities of

climate change to our business model

remains a top priority for the Board and

the ELT. We continue to look at ways to

optimise our energy and raw materials

supply to renewable sources and to

improve the safety and sustainability

profile of our products.

Nearly 70% of our revenue is generated

from products classed as natural,

or naturally-derived, leaving us well

positioned to address the sustainability

drivers in our markets, and support our,

and our customers’ commitments to

achieving Net Zero by 2050. In this

regard, we are committed to setting

new science-based target (“SBT”)

which will be published in 2024.

You can read more about our climate

disclosures on pages 34-41 of this report.

Our people, culture

and values

At Elementis, our people are the key

ingredient of our success and play a

pivotal role in bringing our purpose to life.

We have a value led culture, which is

demonstrated daily through supporting

and respecting each other and ensuring

that we meet the needs of our customers.

We place significant importance on

ensuring the safety and wellbeing of all

employees, and we performed strongly

in this area in 2023. We have also made

good progress against our objective of

creating a more diverse and inclusive

environment, and further increased

the proportion of senior female leaders

across our business.

The Board is committed to a high level of

employee engagement, and we welcomed

the opportunity to meet with employees

in several of our locations over the year.

In 2023, we partnered with a new external

provider to help us improve employee

engagement throughout the business,

moving to a biannual employee survey

process. We believe this new approach will

allow us to better engage with our people,

provide relevant and timely support and

training throughout the year. You can

read more about the results of the

Gallup employee survey on page 49.

On behalf of the Board, I would like

to thank all our employees for their

continued dedication in delivering

this resilient performance.

Governance and Board

There were no changes to the Board

composition in the year.

After nine years’ dedicated service,

Steve Good will retire from the Board

at the conclusion of the AGM. On behalf

of the Board, I would like to thank Steve

for his immense contribution to Elementis

over that time.

Clement Woon will assume the role of

Chair of the Remuneration Committee

from 30 April 2024, the date of the AGM.

We were pleased to welcome Maria

Ciliberti to the Board as a Non-Executive

Director on 11 March 2024. Maria brings

a strong track record of global operational

experience in the chemical industry.

On appointment to the Board, Maria

will become a member of the Audit,

Nomination and Remuneration

Committees. Her appointment further

contributes to the strength and diversity

of the range of skills, backgrounds and

operational experience to the Board.

Shareholder engagement

As Chair, I welcome the opportunity

to maintain an active dialogue with our

shareholders, and seek their feedback

on a range of topics. This year, I have

spent a significant amount of time talking

to our shareholders about the strategic

direction of Elementis.

Following the publication of a letter by

our largest shareholder in which they

recommended the sale of Elementis,

I reached out to other major shareholders,

seeking their views on this matter.

Discussions highlighted the different

needs and views of our shareholders,

which the Board considered.

The Board fully understands the need to

demonstrate that Elementis can deliver

attractive and sustainable value for our

shareholders, noting the lack of progress

in achieving our 2019 objectives. We

believe that the strategy and efficiency

programmes outlined at the CMD,

alongside the updated financial targets,

go some way towards addressing

shareholders’ concerns. Clearly,

the proof will lie in delivery.

We are confident that the Group’s financial

strength gives us flexibility to demonstrate

growth and attractive capital distribution

to our shareholders, including our decision

to reinstate dividend payments.

Outlook

Elementis has two attractive businesses

well positioned in markets with structural

growth drivers. I am confident that we

have the right team and the right strategy

to deliver on our ambitious new targets

and create long term sustainable value

for all our stakeholders.

John O’Higgins

Chair

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

The foundation of Elementis

Our purpose

Unique chemistry,

sustainable solutions.

Our culture

Our supportive culture is

the catalyst to successful

delivery of our strategy.

Our strategy

The right strategy is important

to deliver business growth.

Sustainability

Sustainability flows

through every aspect of

our organisation, starting

with our purpose.

Our Values are core to our high performance culture and reflect

everything that we do

Safety Solutions Ambition Respect Team

Our commitment

to safety is our

way of life.

We make a difference

through our expertise,

responsiveness and

focus on quality.

We have a passion for

excellence and a drive

to create value.

We do the right thing

for all our stakeholders.

We work, grow, and

succeed together.

Sustainability flows through every aspect of our organisation

It underpins our strategy, allowing us to unlock value, provide better outcomes for our stakeholders and deliver on our purpose.

Our sustainability strategy is based on a three pillar framework.

People Environment Responsible business

Read more about our approach to sustainability and our sustainability strategy on pages 16-23 and 29-44.

…enabling us to create value for our stakeholders

Customers Employees Suppliers Investors

Read more about how we engage with, and create value for, our stakeholders on pages 9 and 26-27.

Communities and environment Government, trade bodies and regulators

Read more about our culture and values on pages 45-53.

Our strategy ensures we continue to deliver long term,

sustainable growth…

Innovation Growth Efficiency

Read more about our strategy and strategic progress on pages 16-23.

Elementis plc

Annual Report and Accounts 2023

Our business model

Elementis is a business-to-business specialty chemicals

company, offering performance driven additives

for consumer and industrial applications.

We operate globally via two focused businesses

Personal

Care

We are a leading supplier of rheology

modifiers, based on natural and synthetic

ingredients, and antiperspirant actives.

We offer a wide range of products to

customers across personal care, home

care, industrial cleaning, agriculture

and pharma. Our products help make

skin creams smoother, antiperspirants

work longer, home care products more

natural and plant protection products

more efficient.

Performance

Specialties

We supply rheology modifiers and

complementary specialty additives to

manufacturers of industrial coatings,

decorative paints, additives for oil and

gas drilling and stimulation fluids,

adhesives and sealants.

Our talc grades enhance the mechanical

strength of plastic parts, resulting in

high-quality end products. We supply

talc to customers in a wide range of

sectors including automotive, plastics,

paper, paint and agriculture.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Our competitive advantage

Premium assets

We combine advantaged positions in hectorite and talc, with our distinctive technologies, to create value added customer solutions.

Engaged and skilled people with unparalleled expertise in rheology and formulation solutions

Our people are fundamental to the

continued success of our business.

We have a skilled and engaged global

workforce, and we place great focus on

recognising and valuing their contributions

and the expertise they share.

~100

scientists working in seven laboratories

across four continents

Customer centric,

with global reach

Our global footprint allows us to build

long lasting relationships with our clients

and serve them in their local markets,

as well as large clients across multiple

locations. Our manufacturing footprint

provides flexibility and supply resilience.

manufacturing sites around the world

Hectorite is a natural mineral that delivers excellent rheology

in both water- and oil-based systems, making it an attractive

alternative to synthetic materials. It can be processed at

lower temperatures, leading to lower costs and improved

sustainability. It also delivers important attributes, such as

excellent texture and colour for Personal Care and long term

stability for Performance Specialties applications.

Formulation solutions

We are experts at formulation

solutions. This is the process of

optimising formulation ingredients to

achieve the desired functionality and

performance of the final product. Our

additives represent a small percentage

of a formulation’s cost, but are critical

to delivering end product performance.

We collaborate with our customers

We work in partnership with our

customers, providing technical support

and collaboration to develop innovative

products, tailored to their needs and

goals. We have an established global

key account programme which

enables us to focus on deepening

our customer relationships.

We use proprietary flotation technology, which enables

production of talc that is consistently over 95% pure and can

be customised for colour, size and shape. Our talc grades

enhance the mechanical strength of plastic parts, resulting in

high-quality end products. Furthermore, talc can help reduce

carbon emissions by enabling lighter, thinner plastic designs

that can replace metal parts, while maintaining strength.

Rheology

Rheology is essential to the

performance of a formulation –

it makes the ingredients work together.

We have expertise across multiple

technologies and, with our global asset

footprint, we can cater to large global

clients as well as smaller, but faster

growing, regional players.

We develop innovative solutions

We are known innovators, with

significant technical expertise.

Leveraging our capabilities in rheology,

surface chemistry and formulation,

we focus on creating solutions for

our customers that deliver product

performance improvements,

efficiency gains and enhanced

sustainability credentials.

Our business model

continued

Elementis plc

Annual Report and Accounts 2023

Our integrated business model, combined with our technology and market leading formulation capabilities and the continuous

improvement focus, supports margin enhancement and drives returns. We re-invest in our business to expand our capabilities,

so we can continue to meet the requirements of our customers and generate long term sustainable growth and stakeholder returns.

Sustainable solutions

We have a high natural and naturally-derived material content

in our product portfolio. We continue to work with suppliers and

customers to further increase our use of bio-based materials,

both as a direct replacement of fossil-derived petrochemicals

and to create new products together. Many of our products

already help our customers use less energy and their operations

emit less greenhouse gas (“GHG”).

68%

of revenues from natural or naturally-derived ingredients

Strong cash generation

Strong cash generation enables us to invest for

the long term growth, reduce financial leverage

and generate returns for stakeholders.

77%

average three-year operating cash conversion

How we create value

For customers

By partnering with our customers,

we can provide innovative solutions

that help solve their toughest

formulations challenges, and create

value enhancing products.

joint development

projects

For suppliers

By committing to driving transparency

throughout our value chains and

partnering with suppliers who share

our commitments.

For our people

Elementis promotes a supportive

culture where our people feel safe,

valued and can maximise their potential.

3.86

mean Gallup Q12 score

(out of 5)

For communities and

environment

Behaving responsibly and with integrity

in the communities in which we operate,

and focusing on reducing the

environmental impact of both our

activities and our customers’ products.

60%

reduction in absolute Scope 1 and 2

market-based GHG (vs 2019 baseline)

For investors

We seek to generate reliable returns for

our shareholders over time, through

sustained earnings growth and

shareholder distribution.

2.1 cents

dividend per share

– reinstated

For government, trade

bodies and regulators

We are committed to continuing high

standards of business conduct in

line with regulatory, governmental

and legal expectations.

Read more about how we engage with our stakeholders on pages 26-27.

Read more about our business conduct

on pages 51-53.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Performance

Elementis delivered a resilient financial

performance in 2023, with revenue of

$713 million, down 3% on prior year

(2022: $736 million). Adjusted operating

profit increased 3% to $104 million

(2022: $101 million), and adjusted

operating margin improved by 100bps

to 14.6% (2022: 13.6%). Growth in profit

was driven by improved pricing and

favourable product mix benefits, offsetting

lower volumes in the year. Statutory

operating profit increased to $59 million

(2022: loss of $42 million).

Performance Specialties revenues were

4% lower than prior year at $504 million

(2022: $525 million) while adjusted

operating profit was even with the prior

year at $70 million. Talc performance

recovery and $36 million of new business

was offset by continued Coatings

de-stocking through 2023.

Coatings performance, which represents

approximately half of Elementis revenues,

reflected a combination of customer

destocking throughout the year and

a weaker demand environment. In Asia,

where over 80% of our sales come from

industrial activity, we saw revenue up 2%

on a constant currency basis, with a

modest growth across several countries

including China, helped by the easing of

COVID-19 restrictions in the second half

of the year. The premium decorative sector

in the Americas region was affected by

a weaker housing market and customer

destocking. European revenues were

also lower, reflecting the continued weak

macroeconomic environment, and ongoing

inflationary pressure that impacted

customer demand in both the decorative

and industrial coatings sectors. We

continued to leverage new product

launches and in 2023 worked on

19 customer joint development projects.

The adjusted operating profit margin of

15% (2022: 18%), demonstrates both

the quality and resilience of this business

in challenging market conditions.

Talc revenue remained broadly flat on the

prior year, with pricing actions and better

product mix offsetting lower volumes, due

to weaker end market demand. Sales into

automotive plastics customers were below

the prior year, impacted by destocking.

Despite the flat revenues, the self-help

measures implemented over the year

led to a material improvement in Talc

profitability, with much improved adjusted

operating margin of 10% (2022: negative

0.3%). Looking ahead, we see attractive

growth opportunities in higher value

talc applications and remain focused

on driving improvement in this business.

Personal Care performed well during the

year, with sales marginally lower compared

to the strong prior year and adjusted

operating profit higher at $50 million

(2022: $49 million). Revenues were

impacted by lower market related volumes

but were partly offset by $15 million of

new business, improved pricing and a

higher value product mix. In Cosmetics,

we saw growth across all regions, with

a particularly strong growth in Asia, driven

by continued investment in sales and

marketing capabilities. We also saw

continued growth in Skin Care revenues,

supported by new product innovation.

Antiperspirants (“AP”) Actives sales were

below the strong prior year, reflecting

input driven price adjustments and lower

volumes. Overall, in Personal Care,

product mix improvements and price

actions offset the weaker volumes resulting

in an improved segment adjusted

operating margin of 24% (2022: 23%).

Paul Waterman

Chief Executive Officer

Innovation,

Growth and

Efficiency

strategy driving

profit growth

and improved

margins.

“ Elementis delivered

a resilient profit

performance and an

improved operating

margin in the face

of challenging

market conditions.”

Chief

Executive

Officer’s review

Elementis plc

Annual Report and Accounts 2023

At the end of the year, we completed

a multi-year project of transferring our

enterprise resource planning (“ERP”)

systems into a single global system.

We expect this to enable improved data

standardisation and analytics, improving

both efficiency and effectiveness.

Safety

Safety is fundamental to the success of

Elementis and a core part of our culture.

We made a good progress on our objective

of becoming a zero-injury business,

continuing to drive our TogetherSAFE

campaign across all our sites. In 2023, we

achieved a 50% reduction in work-related

injuries, with 90% of our sites remaining

injury free over the year.

We continued to strengthen our processes in

2023 making good progress on our process

safety management improvement plan and

developing enhanced health, safety and

environment (“HSE”) standards.

The number of environmental events

increased over the year, with seven Tier 2

events reported in 2023. A thorough

analysis of each incident was conducted

with learnings communicated across

our manufacturing sites to prevent

future occurrences.

Sustainability

We place sustainability at the core of

our strategy. Our aim is to develop

high-performance additives that deliver

positive, sustainable outcomes for the

environment and for society. We seek to

design products that use fewer resources

and create less pollution. Our areas of focus

include reducing GHG emissions with

an ambition to reach Net Zero by 2050;

improving water and energy management;

and leveraging improved product design

to deliver better lifecycle impacts.

In 2019, we set our 2030 environmental

targets, and this year we have met the waste

and water emissions target reduction.

We are working towards setting a SBT,

which we plan to finalise in 2024. In 2023,

we reduced Scope 1 and 2 (market based)

GHG emissions by 6.7% compared to the

prior year, with 77% of our purchased

electricity coming from renewable or low

carbon sources.

We focus our capabilities on finding

unique solutions to emerging sustainability

challenges. For example, our organoclay-

based gels improve the water resistance

of consumer sunscreens, increasing their

effectiveness and lowering loss to the

environment. We have a high natural material

content in our product portfolio, and 68%

of Group revenues (2022: 67%) were

generated from natural or naturally-derived

ingredients (as defined by ISO 16128).

Our products also help customers do

more with less resources, such as

additives that help adhesives instantly

grip heavy ceramic tiles without slipping,

thus saving materials, time, and money.

We continue to improve our environmental,

social and governance (“ESG”) disclosure

processes and had our Scope 3 emissions

verified by a third party for the first time

in 2023. We are also pleased to have

achieved a Gold rated score from

EcoVadis for the third year, and a B rating

from Climate Disclosure Project.

People and culture

The financial results achieved this year

are a testament to the hard work and

commitment of our people, who continue

to be dedicated to the success of the

company. This year we launched a

biannual engagement survey with a new

external provider, which will allow more

regular employee engagement and provide

better opportunities to support our people.

In 2023, we have announced changes

that have impacted our global workforce.

In January 2023 we sold our Chromium

business and shortly after we started

working on a restructuring programme,

Fit for the Future, that will streamline and

optimise our organisation. This restructuring

programme, which will trigger c.190

redundancies, was announced in

September 2023, followed by extensive

consultations and support for employees

impacted by these changes. Our people

have demonstrated incredible resilience as

we make the required, but difficult, changes

that will position the company for future

success. It is encouraging to see how teams

have supported one another through this

change, showcasing our values at their best.

I would like to thank the whole Elementis

team for their fortitude, adaptability and

commitment over the year and look

forward to together creating a successful

future for the Company.

Outlook

Elementis has seen a good start to the

year, with sales ahead on the prior year.

The global macroeconomic environment

remains uncertain. Notwithstanding this,

we are focused on executing our self-help

efficiency and growth programmes as

this will support ongoing performance

improvement, regardless of the demand

environment that we face.

We have a portfolio of high-quality

businesses, and a clear and consistent

strategy based on Innovation, Growth and

Efficiency. We have a strong pipeline of

new products that is driving new business,

and we continue to invest in our business

for long-term growth.

Most importantly, we have a talented

and dedicated team that is completely

focused on delivering the 2026 objectives

communicated at our November CMD.

Paul Waterman

Chief Executive Officer

In 2023, we made significant progress on

our deleveraging ambition, with net debt

reducing to $202 million (2022: $367

million) benefitting from the $139 million

of proceeds from the sale of Chromium

earlier in the year and improved

profitability. As a result, the net debt to

EBITDA ratio reduced to 1.4x (2022: 2.2x),

and we are pleased to reinstate dividend

payments and propose a final dividend

of 2.1 cents per share. Going forward,

we plan to pay a sustainable progressive

dividend, while further reducing leverage.

Strategic progress and

new financial targets

We made good progress implementing

our strategy, launching 12 new products,

and delivering $51 million of new business.

We delivered 14% of revenues from

innovation sales and had a record new

business opportunities (“NBO”) pipeline of

$363 million at the end of 2023. Through

discipline and focus, we have managed

both costs and pricing well, and the financial

recovery of our Talc business is on track.

At the November CMD, we communicated

the growth and efficiency initiatives that

will underpin our performance through

2026 as well as our sustainability strategy.

Going forward, we will focus on seven

growth platforms across Personal Care

and Performance Specialties, targeting

$90 million of above market revenue

growth by 2026. This will be driven by

ongoing innovation, utilising our

advantaged technologies, supported

by key industry trends.

We also announced two efficiency

programmes that will deliver $30 million

of cost savings over the next two years.

The Fit for the Future restructuring

programme will deliver $20 million cost

savings by 2025. This programme is

well underway, with significant progress

in the outsourcing and consultation

processes. We announced the opening

of a new support base and research and

development (“R&D”) laboratory in Porto,

Portugal, with the build out and new hires

in this location already underway. A further

$10 million annual savings by 2025 will

come from supply chain optimisation and

procurement savings. To underpin this, we

will further streamline our manufacturing

footprint by consolidating our AP Actives

plants from three to two locations in 2024.

We believe the combination of growth

and efficiency programmes announced

in November will deliver our ambitious

2026 performance objectives:

Adjusted operating profit margin

of 19%+

Three-year average operating

cash conversion above 90%

Return on capital employed

(excluding goodwill) above 20%

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Elementis plc

Annual Report and Accounts 2023

How will you achieve

the above market

revenue growth?

We set out seven key growth platforms,

three for Personal Care and four for

Performance Specialties. Growth across

those platforms will be driven by innovative

new products, utilising our advantaged

technologies, and benefitting from key

industry trends.

For example, in Personal Care, most

of our products are made out of natural

ingredients, which is a real benefit given

the strong market demand from our

customers and ultimately consumers,

for more sustainable solutions. We have

a global reach, which positions us well

to grow in the future.

In Performance Specialties, which includes

Coatings and Talc, we see customers

demanding more natural ingredients,

that can deliver real efficiency benefits,

for example, by helping reduce processing

or logistics costs. We have the expertise

and technology to solve our customers

biggest formulation challenges. Over the

years, this allowed us to expand into new

market segments and enlarge our

addressable markets.

At the end of 2023, our new business

pipeline stood at a record $363 million,

with over 50 products that we plan to

launch over the next three years. This will

support our target of $90 million of above

market revenue growth by 2026.

How will you achieve

the $30 million of

annual cost savings?

The announced $30 million of cost

savings will come through two efficiency

programmes. The first one, Fit for the

Future is a project we initiated following

the sale of Chromium early in 2023.

This includes around 190 redundancies,

moving roles to lower-cost locations and

outsourcing back-office transactional

roles to India.

We announced closure of our Cologne

office in 2024 and a creation of new global

support and R&D support centre in Porto.

We are making good progress already

and expect to deliver $20 million of cost

savings, with c. one third delivered in

2024 and the remainder in 2025.

In addition, we have a great opportunity to

build on our momentum further improving

Global Supply Chain and Procurement

efficiency. We expect to deliver further

$10 million of annual cost savings by

2025 through more automated processes,

more efficient energy uses as well as

optimising our manufacturing footprint.

Talc has delivered much

improved performance

in 2023, can this business

continue to improve?

Talc performance improved materially

in 2023, despite a difficult demand

environment, due to pricing actions

and effective cost management.

We have a new leadership team in place

and the implementation of Performance

Specialties has improved our execution.

We continue to target high-value

segments, focusing on value over volume.

Vehicle light-weighting, where talc is

used to improve the strength of plastic,

and technical ceramics, where highly

engineered talc enhances the ceramic’s

stability, are two key examples.

We are also targeting continued synergies

with our Coatings business, where

talc is used as an additive in various

applications such as protective coatings.

Talc will also benefit from the Elementis

efficiency program.

This focus on high-value applications while

continuing to drive efficiency will support

further performance improvement in the

near term.

Paul Waterman

answering key

stakeholder questions

What gives you confidence

you will achieve the new

operating margin target

of 19%+?

The improvement in our operating margin

is supported by growth and efficiency

programmes we announced at our CMD.

Around a third of the improvement

is driven by the above market revenue

growth across the Personal Care

and Performance Specialties where

we are focusing on higher margin

market segments.

The other two thirds are supported by our

new efficiency programmes, which will

deliver $30 million of savings by 2025.

These programmes are already underway,

and we are on track to achieve the first

$12 million of savings in 2024. We see

attractive growth opportunities across

many of our markets, where we are well

positioned, with innovative technologies

and long-standing customer relationships.

Even if the demand environment is

unchanged, this self-help program will

underpin performance delivery. This gives

me the confidence we can achieve the

19%+ operating margin target we set

in November.

Elementis plc

Annual Report and Accounts 2023

Investment case

Our shareholder value proposition is built on:

Our California based mine is the

largest high quality hectorite mine in

the world, with substantial reserves

of white coloured hectorite.

We also own significant deposits

of high-quality talc in Finland.

Our vertically-integrated model

utilises our natural mineral

resources which, combined

with our technology and market

leading formulation capabilities,

creates unique product sets and

compelling competitive advantages.

A leading supplier of specialty

chemicals, we leverage

our capabilities in rheology,

surface chemistry and formulation

to solve our customers’

formulation challenges.

Through our key account

partnerships, we develop

customised solutions and provide

ongoing technical support, adding

further value to our customers.

We combine our expertise in

natural clay and talc minerals

with bio-based molecules to

create more sustainable solutions

for our customers.

We take pride in our extensive

portfolio of natural products and

sustainable formulation concepts,

meeting consumer needs while

minimising our, as well as our

customers’, environmental impact.

Focused on market segments with

structural growth opportunities,

supported by industry trends.

Our manufacturing and R&D

capabilities in key regions allow us

to serve customers globally and

provide supply chain resilience.

Our strong cash generation,

alongside our Innovation, Growth

and Efficiency strategy, support

re-investment for long-term

growth, financial deleveraging and

sustainable shareholder returns.

1. Differentiated premium assets

3. Customer centric and innovation focus

5. Sustainable solutions

2. Two attractive, resilient businesses

4. Global reach

6. Strong cash generation

Hectorite:

>50

years of estimated

resource life

Talc:

>90

years of estimated

resource life

joint development

projects

68%

revenue from

natural products

Personal Care:

42%

of Group

operating profit

Performance

Specialties:

58%

of Group

operating profit

manufacturing

plants and seven

technology

centres across

four continents

>90%

operating cash

conversion target

1 Pre central costs.

2 Three-year average.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Sustainability

Climate change and the increasing

consumption of resources and pressures

on nature require new solutions to

address the complex global and societal

issues they cause. This includes the

transition to cleaner energy, and the

creation of a circular economy that

can benefit everyone.

What this means for our industry

Consumers are becoming more

sustainability focused, demanding

natural products that have low negative

impact on the environment, communities

and workers in the value chain

It is increasingly important that

companies can support claimed product

benefits with credible, science-based

evidence and standards

Increased desire for solutions that

contribute positively to the health

and wellbeing of society

Demand for solutions that help

resources go further and contribute

towards the circular economy

Pressure to minimise the social and

environmental impact of production

throughout supply chains

Our opportunities

Leverage our naturally-derived products

and high-quality hectorite clay resource

to help customers use less material,

energy and water

Innovatively designed products

to help minimise pollution in

downstream applications

Growth in natural and naturally-derived

rheology modifiers as a replacement

to synthetic alternatives

Improved manufacturing processes and

supply chain management, resulting in

better outcomes for all stakeholders

How are we responding

Innovation focused on specialty

additives that deliver improved

product performance, lower

operational costs and enhanced

sustainability claims, e.g. low-

temperature organic thixotropes

and powdered non-ionic synthetic

associative thickeners (“NiSATs”)

Identifying new applications for our

natural personal care ingredients,

bringing long lasting and more

efficacious benefits from the

whole formulation

Setting challenging environmental

targets that help us to innovate

better solutions, such as our

science-based target initiative

(“SBTi”) commitment to reduce

GHG emissions

Investing in our capabilities to

assess risk and quantify impacts

of our supply chain, portfolio and

products, to better prioritise our

most impactful actions

Continuing to improve product

verification against leading

certification standards such as

COSMOS and Ecolabel to highlight

the credentials of our products

Demographics

The United Nations expects the

world’s population to increase to nearly

10 billion by 2050, driven by increased

longevity, increasing urbanisation and

accelerating migration.

Most of this population growth will be in the

developing world. Economic development,

along with an expanding middle class,

is fuelling consumption and demand

for higher quality products. In the West,

older consumers with greater disposable

income, are becoming more health and

sustainability focused, with increasing

interest in services and experiences.

What this means for our industry

Increasing demand for construction and

infrastructure related solutions

Rise of new ‘giant brands’ in emerging

markets, demanding quality products

and faster speed to market

Rising demand for personal care

products such as colour cosmetics

and skin creams

Increased demand for longer lasting and

more technologically advanced products

Demand for products that make

consumers’ lives easier and provide

premium and feel good characteristics

Our market environment

We identified three key drivers which are creating and changing trends in the markets

in which we operate. We have positioned our strategy to address the needs of our

clients, while maximising the growth opportunities arising from those megatrends.

Elementis plc

Annual Report and Accounts 2023

Technology/digital

Technology progress is advancing rapidly,

and technologies are becoming ever more

interconnected. Computing power and

materials science are the key enablers

to drive technology changes, providing

options for process and product innovation

and increased personalisation.

Technology is also being used to drive

improvements to customer experiences:

for example, through providing richer

data insights, better monitoring of

customer engagement and automating

non-value-adding processes.

What this means for our industry

Ability to move fast and adapt

the right technology provides

competitive advantage

A growing use of simulation and software

is required to generate smarter insights

early on and to develop products

faster, more efficiently and in a more

sustainable manner

Renewable energy applications

require more demanding materials

to deliver performance

Digitalisation, with generation of big

data and its interpretation using artificial

intelligence (“AI”), will impact consumers’

behavioural changes through better

access to information, improve decision

making processes, and change the way

the different players interact across

value chains

Multichannel approach to customer

engagement increases transparency

across the supply chain

Technological changes increase

customer need and willingness to

reformulate, while digital support

to testing and trials can speed up

innovation projects

Virtual reality opens opportunities for

remote training and technical support

Our opportunities

Access to digitalised processes and

customer interface increases the speed,

flexibility and service level we can

provide to our customers

We can achieve safer and more

efficient production technologies

via manufacturing automation and

digitalised supply chain

Increased market penetration amongst

the SMEs is boosting creation of indie

brands on a global scale

Use of AI driven tools to accelerate

product development and formulation

solution creation

New technologies may open new

value pockets in fast growing markets

How are we responding

We are developing digital data

management capability to scale

new products faster across

the globe

Continue to explore innovative

technologies and testing

our products’ suitability

for new applications

Better use of customer data to

analyse search behaviours and

product reviews, generating

insights on new trends in our

target markets. Ability to process

data quickly and accelerate

innovation will lead to better

customer proposition

We are setting up our Product

Information Management system,

one centralised repository for our

product information, which will

create a user-friendly and intuitive

interface for Elementis’ employees,

partners and customers

Increased digital media outreach,

online customer education,

sophisticated formulation support

and close collaboration with

distribution partners

Increased Product Stewardship

and Regulatory Affairs efforts

and proactive positioning of

technologies as being natural

and safe

Continuing to improve our

automation capability, enhancing

both productivity and safety

in our plants

Our opportunities

New geographic markets for consumer

and industrial products that require

premium performance additives

Our manufacturing and R&D capabilities

in key regions allow us to serve

customers globally and provide

supply chain resilience

Our high-quality hectorite clay resource

has a chemical structure that can retain

various active ingredients, delivering

a combination of benefits for a wide

range of personal care products

Consumers are willing to pay a premium

for products that deliver superior

performance with additional benefits

Higher demand for additives

that deliver premium product

performance characteristics

Opportunities for natural or naturally-

derived ingredients (e.g. hectorite,

talc or castor wax-based)

How are we responding

Expanded our capabilities in

China and Brazil, allowing us to

make local formulations, and

develop new products that

comply with local regulations

Expanded resources in Asia

in new and existing regions,

generating more insights

on local market needs and

deepening innovation dialogue

In 2023, we announced plans

to open a new R&D facility in

Porto, which will enhance our

customer proposition

Leveraging our leading rheology

position and high-quality

hectorite resource to launch

new natural rheology modifiers

for Personal Care

In 2024, we plan to launch our

first natural film formers for

sun care and colour cosmetics

Planning product launches that

are suitable for the ‘mass’ market

and reduce speed to market

Launching new product solutions

with better durability, workability

and aesthetics for the decorative

and construction markets

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Elementis plc

Annual Report and Accounts 2023

We are a global leader in

performance driven additives that

help create innovative solutions

for our customers. Leveraging

our capabilities in rheology,

surface chemistry and formulation,

we help our customers create

better products.

Our two businesses operate in

attractive markets with structural

growth opportunities, supported

by clear market and industry trends.

We constantly seek to be a fit

for purpose and more efficient

business, agile and growing, with

our impact on the environment

and the communities in which

we operate at the forefront of

our minds.

Our sustainable approach

We respond to sustainability

drivers (Climate, Circularity,

Nature and Health) in our

markets and use our expertise

to find new ways to add value.

For example, innovating with

a new natural skincare

ingredient, introducing a novel

bio-based coating additive,

developing an antiperspirant

using waste aluminium or

enabling our customers to

use safer ingredients.

Our sustainable approach

As innovation becomes

established in the market,

we help our customers to

maximise their positive impacts.

We add to the health and

wellbeing of society with natural

personal care products,

coatings additives with low

volatile organic compounds

(“VOC”), avoiding the use of

biocides and contributing to

the effectiveness of vehicle

pollution control systems.

Our sustainable approach

We contribute to our customers’

sustainability goals. Our

additives and ingredients

help to make our customers’

products more durable, and

can lower processing energy

requirements and improve

transportation efficiency.

We also strive to make our own

operations more efficient and

reduce their environmental

impact by increasing our use

of renewable energy, recycling

water and reducing waste.

Strategic progress

Elementis operates via two focused businesses, well positioned in attractive and

structural growth segments. Our strategy is built on the three pillars of Innovation,

Growth and Efficiency, underpinned by our sustainability objectives.

Innovation

2023 progress

Launched 12 new products

68% of revenue from natural

or naturally-derived products

Total innovation sales

increased to 14.3%

(2022: 13.3%)

28 customer joint

development projects

2023 progress

$51 million of NBO created

15% revenue growth

in Colour Cosmetics

10% revenue growth

in Personal Care Asia,

driven by growing interest

in our new generation

hectorite-based gels

Record NBO pipeline of

$363 million (2022: $282m)

2023 progress

Delivered $10 million of cost

savings in 2023

Met two out of four 2030

sustainability targets

Completed ramp up of

our antiperspirant actives

plant in India

Completed the multi-year

programme to consolidate

all our ERPs into a single

global system

50% reduction in work related

injuries and progress on

process safety improvements

Read more about our approach to innovation on pages 18-19.

Read more about our growth strategy on pages 20-21.

Read more about our approach to efficiency on pages 22-23.

Growth

Efficiency

Link to KPIs

Refer to the Key performance indicators section on pages 24-25 for further detail, including how those link to our strategy.

Elementis plc

Annual Report and Accounts 2023

Two efficiency platforms delivering $30 million of annual cost savings by 2025

Growth platforms aligned to industry trends

Growth platforms

Trends

Opportunity

Sustainability

Technology/

digital Demographics

Personal

Care

Skin care

Natural solutions to replace

synthetic ingredients

Colour cosmetics

Skinification, individualisation,

speed-to-market

Antiperspirants High-efficacy and natural products

Performance

Specialties

Architectural

coatings

Expand share in premium segment

Industrial coatings Expand sustainable coatings

Adhesives, sealants

and construction

additives

Offering more sustainable

product solutions

Talc

Gain share in selected

high-value target segments

Fit for the Future organisational restructuring

Supports strategy implementation

Simpler, streamlined and lower cost organisation

Leverages digital infrastructure and enhances capability

Implementation initiated in Q3 2023, complete during 2025

Global Supply Chain and Procurement

Global Supply Chain: optimising manufacturing network

and scaling continuous improvement delivery

Procurement: enhanced organisational capabilities

and practices

$20m

annual savings by end 2025

$10m

annual savings by end 2025

Material growth and efficiency opportunities announced at our November CMD

$90m

above market revenue

growth by 2026

50+

new products

Seven growth platforms across

Personal Care and Performance Specialties

Near term, larger

efficiency platforms

$30m

of savings by 2025

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Strategy in action

Innovation

68%

of revenue generated from natural

or naturally-derived products

We are a global leader in performance

driven additives and are focused on

creating solutions for our customers

that deliver product performance

improvements, efficiency gains and

enhanced sustainability credentials. We

continued to leverage our relationships

and digital capabilities to drive the launch

of 12 new products in 2023.

Our innovation focus is clear. We want

to create solutions for the biggest

challenges that our customers face

which in turn, are reflected in our

growth platform focus.

In Personal Care, consumers no longer

just want natural ingredients that deliver

superior performance. They are looking

for more sophisticated products, for

example, with additional skin care

benefits. An example is CeraVe, a face

care product which uses hectorite and

promotes it on its packaging, due to

its rheology modification properties,

but also as an active ingredient for

oil absorption.

Likewise, the Coatings industry wants

high-performance additives that offer

sustainability and new efficiency benefits.

Our Rheolate

powder, which we

expanded this year, provides excellent

paint performance and enhanced film

build. Given its powder form, it requires

only half the storage space compared

with liquid alternatives, and reduces

the shipping volumes, leading to lower

transportation emissions. It is also

biocide free with low VOC.

Innovation at Elementis goes hand in

hand with sustainability. All our new

product launches and pipeline projects

must have clear sustainability credentials.

In 2023, nearly 70% of our revenue

was from natural or naturally-derived

chemistries, for example, castor wax

based organic thixotropes. In addition,

we are conscious of the need for our

products to contribute to the overall

wellbeing of society, whether it is through

bio-based Thixatrol

technology or

utilisation of recycled aluminium in

antiperspirant actives.

In addition, through our established

global key account programme, we work

closely with our customers, offering our

expertise and innovation, and keeping

them at the forefront of their industries.

Our scientists are formulation experts

in our core markets and our laboratories

are equipped to facilitate formulation of

finished goods similar to our customers’

products. We can test these materials

to mimic real life conditions for

demonstration. This allows us to build

strong technical and commercial

relationships with major customers and

co-operate in the development of new

formulations to enhance their products

and processes. This drives volume and

sales growth, increases our share of

these customers’ spend and opens up

major new business opportunities. In

2023, we worked on 28 joint development

projects with customers across Personal

Care and Performance Specialties,

of which 15 were with our global

key accounts (“GKA”). In Coatings,

we increased the share of revenues

from GKA by 45% since 2020.

Our revenue from new and innovation

products increased to 14% compared to

13% in 2022. Our new business pipeline

stood at over $360 million at the end

of 2023, with over 50 products in the

pipeline, of which approximately 15 are

scheduled to launch in 2024. This will

support our ambition to achieve an

adjusted operating profit margin target

of 19%+.

2023202220212020

13.5 13.5

13.3

14.3

Innovation sales %

Elementis plc

Annual Report and Accounts 2023

Priorities for 2024

Launch at least 15 new products

Increase new and proprietary products

to 15% of sales vs 14% in 2023

Expand alternative sourcing and

innovation solutions for secure

new material supply

Link to risk

Global economic conditions and

competitive market pressures

Regulatory compliance and

product stewardship challenges

Intellectual property and know-how

Portfolio innovation and technology

For detail about our approach to risk,

see pages 63-71.

Powdered NiSAT Rheolate

PHX 7025

Synthetic rheology modifiers like our

Rheolate

family of urethane-technology

additives are extensively used in

architectural paint formulations.

They are supplied in liquid form

and typically contain 80% water.

With customers demanding higher

performing, safer and more sustainable

paints, we wanted to create a solution

that reduced the high water content,

thus eliminating the need to ship water

around the globe, while maintaining

the superior performance benefits

that make our Rheolate

family the

preferred choice.

With this goal in mind, we applied

our innovation expertise and have

developed Rheolate

PHX 7025,

expanding our family of 100% solid

urethane rheology modifiers.

These 100% active powders significantly

reduce the global shipping volumes. In

addition, they can be easily incorporated

into paint formulations, resulting in

improved handling, increased efficiency

and meeting the latest health and safety

demands. All this, whilst preserving the

high quality we are known for.

Sustainability: Realise up to 80%

reduction on transportation and

reducing storage space with these

solvent-free modifiers

Safer ingredients: Biocide and

VOC free and compatible with

allergy and asthma friendly paints

Performance: Experience a higher

efficiency, improved rheology and

excellent dry film properties

We introduced the Rheolate

PHX 7025

during the 2023 edition of the European

Coating Show in Nuremberg, Germany,

a leading event in the coatings industry

and currently have over 50 customers

testing it in their formulations.

Elementis plc

Annual Report and Accounts 2023

Strategic Report Financial Statements Shareholder InformationCorporate Governance

BENTONE

PLUS GLOW

– Radiance unleashed! Hectorite X Actives

The skin glow trend has taken the

beauty industry by storm. Consumers

are no longer content with simply having

clear, matte skin; they are seeking

products that give them a radiant,

luminous complexion. Glowing skin

is a sign of health and vitality, and no

wonder, as it is universally flattering.

Whether labelled as dolphin skin, glass

skin, glazed donut skin or other current

skin terms, all these multi-functional

claims and cross-category products are

required to improve the skin condition of

the consumer and ultimately blend skin

care and colour cosmetics seamlessly.

Responding to the emerging ‘skin glow’

trend, BENTONE

PLUS GLOW, a new

hectorite-gel technology, joins forces

with naturally-derived active ingredients

to provide a speed to market solutions

that blends skin care and colour

cosmetics seamlessly.

BENTONE

PLUS GLOW combines

natural ingredients that promote the

skin’s barrier function, creating a healthy

glow and providing lasting hydration.

It is designed to impart rheological

control and suspension to the oil phase

of cosmetics and skincare products,

allowing for an optimal distribution of the

active ingredients on the skin’s surface.

In colour cosmetic products,

BENTONE

PLUS GLOW also allows

an optimal distribution of pigments,

which enables an immediate benefit

for the consumer.

Cosmetic products developers value

it for its high formulation flexibility,

delivered through an increased

hectorite clay content.

Growth

$90m

above market revenue growth by 2026

We set out seven growth platforms

across Personal Care and Performance

Specialties. Here we focus on market

segments with structural growth

opportunities, utilising our key

technologies. Together, they are

expected to generate over $90 million

of above market revenue by 2026.

Our Personal Care business operates

across three core market segments, in

which we have built a strong competitive

position: Skin Care, Colour Cosmetics

and Antiperspirants.

For further detail on Personal Care

performance and strategy, see pages 60-61.

We have seen good growth in Colour

Cosmetics, especially in Asia, where

we recently enhanced our sales and

marketing capabilities.

We expect further growth in Colour

Cosmetics sales in the coming years,

supported by our innovative products,

such as Bentone

Luxe XO and the

Bentone

Plus Glow. We have a strong

new products pipeline for 2024, which

includes a range of patent pending

Bentone

Ultimate products and a natural

film former that will enhance the

wear resistance of colour cosmetics,

for example in lipsticks.

We believe these products will further

strengthen our leading position in colour

cosmetics and allow us to expand in

new regions and market segments.

As a result, we target a delivery of

$10 million of above market revenue

growth by 2026 for this application.

Skin Care is an attractive part of the

personal care market, where we have

historically had limited participation.

This segment has been growing at

around 4-5% annually, supported by

increasing demand from consumers

looking for more sustainable products

with natural ingredients.

Strategy in action

2023202220212020

248

281

282

363

NBO pipeline $m

Our hectorite-based additives are well

positioned to benefit from this trend,

as they work equally effectively in both

water-based and oil-based products.

We entered the skin care market in 2019

and have seen good momentum in this

business since. Going forward we will

focus our innovation efforts on natural

rheology with more sophisticated

products, but in addition we will also

create products that offer attractive

new functionalities. Our ambition is to

deliver growth at two to three times

the market by 2026.

Finally, the third area of focus,

Antiperspirants, where we have a global

leading position in antiperspirant actives.

We see trends for longer lasting sweat

protection, and increasingly, growing

demand for more natural products,

including natural actives.

As recognised innovation leaders

in this field, we are focusing on new

products that address these demands,

for example, our new range of

antiperspirants utilising waste aluminium,

and we have an ambition to develop

actives that bring antiperspirant benefits

to the deodorant product category.

We believe our ambitious plans will help

us to deliver mid-single-digit revenue and

margin growth over the next three years.

Elementis plc

Annual Report and Accounts 2023

Priorities for 2024

Deliver target revenue growth across

seven growth platforms

Generate $50 million of new business

Expand manufacturing capabilities at

new India plant

Link to risk

Global economic conditions and

competitive market pressures

Business interruption due to supply

chain failure of key raw materials

and/or third-party service provision

Business interruption due to a major

event or a natural catastrophe

For detail about our approach to risk,

see pages 63-71.

In Coatings, the three growth platforms

are all positioned to respond to specific

market needs or major market trends.

For further detail on Coatings performance

and strategy, see page 61-62.

The first of these, Architectural Coatings,

is an important market for Elementis,

with the premium decorative segment

estimated at approximately $1 billion

and growing 4% per annum. We have

developed a suite of innovative,

high-performance products.

We believe this, alongside our

manufacturing footprint across three

key regions, will support our ambition

to grow at twice the market by 2026,

in this attractive market segment.

The second growth platform is Industrial

Coatings, where we see growing demand

for more sustainable coatings and

coating additives, driven by regulations

and market trends. We focus on

an addressable market of around

$800 million, which includes additives

for high-performance segments such

as marine, protective and automotive

industries, growing at c.4% annually.

Across this market segment, we expect

to deliver $30 million of incremental

revenues by 2026, focusing on

ingredients that make customers’

formulations more sustainable

without sacrificing performance.

Our third growth platform comprises

Adhesives, Sealants and Construction

Additives. This is a relatively new

application for Elementis, with the target

market valued at around $700 million,

growing at 5% per year. Growth in this

market segment is driven by trends such

as lightweighting and more efficient

manufacturing processes. Our ambition

is to double our market share from 3%

to 6% by 2026, by focusing on innovative

products, such as our low activation

temperature Thixatrol

technology.

A major component of our growth

strategy is our key account management

programme. We have built strong

technical and commercial relationships

with major customers and cooperate in

the development of new formulations to

enhance their products and processes.

This drives volume and revenue growth

and deepens our relationships with

major customers. In 2023 we worked

on 28 customer joint development

projects, generating material revenues

and contributing to improved

product mix.

The final growth platform focuses on

Talc. Our medium-term strategy focuses

on high-value applications across

selected market segments, with an

estimated market size of $800 million,

and growing at approximately 4% per

annum. Those include, for example

electric vehicle manufacturing, which

utilises lighter, reinforced plastics.

We have a strong track record of

identifying and developing new product

applications, with five new products

launched over the year, and a new

business pipeline of $50 million. We

believe this will help us deliver $15 million

of above market revenue growth by 2026.

For further detail on Talc performance

and strategy, see page 62.

joint development

projects

Elementis plc

Annual Report and Accounts 2023

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Growth platforms Key technologies Benefits

Personal

Care

Skin care

Hectorite, hectorite derivatives,

natural oils

Natural, luxurious touch and feel,

formulation stability

Colour cosmetics Hectorite derivatives, natural oils

Natural, suspension of actives and

pigments, formulation flexibility

Antiperspirants Inorganic actives, hectorite derivatives

Long lasting sweat protection,

dispersion of actives

Performance

Specialties

Architectural

coatings

NiSAT, dispersants, bio-based defoamers

Improved hiding and stain resistance,

safer and more sustainable paint

Industrial coatings

Organoclays, organic thixotropes,

dispersants

More sustainable coatings

enhanced aesthetics

Adhesives, sealants

and construction

additives

Organic thixotropes, hectorite

rheology agents

Improved time and material efficiency,

safer handling

Talc High-purity talc through unique flotation Improved plastics rigidity and strength

Efficiency

$30m

annual savings by 2025

We continuously work towards improving

our organisation, driving efficiency

gains, and becoming a more resilient

business. Over the last year we delivered

$10 million of savings, completing the

$25 million of savings programmes

announced in 2021.

This was achieved through a combination

of continuous improvement, procurement

savings and strict cost management over

the year, as well as delivery of Coatings

and Talc synergies. Furthermore, we

eliminated the first $4 million of stranded

costs following the sale of Chromium.

This year, at our CMD, we announced

two efficiency programmes, delivering

$30 million of additional cost savings by

2025. The first one is Fit for the Future,

targeted to deliver $20 million annual

savings by end 2025. The large majority

of these will come from staff cost savings

in three areas. Firstly, through optimising

of our organisational structure – following

the sale of Chromium, we are a smaller

company, and we believe the size our

workforce should reflect this. We are

restructuring into a simpler and more

efficient organisation, focused on our

three key regions. We will also close

our Cologne, Germany, office in 2024.

Secondly, we will create a new R&D

and support centre in Porto, Portugal.

This location is a proven global business

services location, with the added

advantages of being a source of great

R&D talent as well as being a lower

cost location. Since the announcement

of the Fit for the Future programme in

Q3 2023, we have hired multiple roles

in Porto, Portugal, and expect to further

consolidate roles from higher cost

locations, into the new Porto office.

We are excited about creating a new

showcase laboratory, which will allow us

to strengthen our customer proposition.

Finally, we will outsource over

20 back office roles to India. This

move will provide access to stronger

processes, digital tools, and automation

opportunities that we would not be

able to deploy quickly ourselves.

The second efficiency programme

focuses on supply chain optimisation

and procurement efficiencies, where we

target an additional $10 million of annual

savings. Half of those are expected to

materialise in 2024 and half in 2025.

In our supply chain, we have built

capability in continuous improvement.

Examples of recent successes include

the optimisation of raw material usage

in New Martinsville, US, site and the

transfer of hectorite technology to our

organoclay manufacturing plant at Anji,

China, enabling the site to produce

higher value products while increasing

global capacity for hectorite production.

We will drive better overall equipment

effectiveness through more automated

processes, reduce production

bottlenecks and improve overall energy

use across our business. In addition

to running our plants better, we see

scope to optimise our manufacturing

footprint, especially as we completed

the ramp up of our antiperspirant

actives plant in India.

Strategy in action

Priorities for 2024

Deliver targeted efficiency savings

of $12 million

Implement continuous improvement

projects in the supply chain to lower

cost and reduce environmental impact

Improvement in working capital

leading to higher cash conversion

Make further progress vs 2030

environmental targets and develop

updated SBT

Launch ESG risk assessment

process, enhancing our responsible

sourcing system

Develop site decarbonisation plans

Link to risk

Business interruption due to a supply

chain failure of key raw materials

and/or third-party service provision

Business interruption due to a major

event or a natural catastrophe

Health and safety

For detail about our approach to risk,

see pages 63-71.

Elementis plc

Annual Report and Accounts 2023

Continuous improvement – dust filter

cleaning method change at Sotkamo

At Elementis, we use a pneumatic

conveying system to move dry talc

products and remove dust. This

process uses airflow to carry powder

in a conveyor pipe and filters are

required to separate solids and

excess air.

In the filter housing, air passes through

the filter bags removing talc dust,

which enables air to be discharged

from the top of the baghouse into

the atmosphere. During this process,

the filter cloth gaps become filled

with particles and the filter becomes

less efficient. To clean the filter bags,

an air pulse is given to clean the

particles from the filter cloth

re-opening the gaps.

In our Sotkamo plant, we were looking

at ways to lower the air compressors’

energy consumption by reducing

their running time. Dust filter cleaning

consumes a lot of compressed air

and most of the filters had pulse jet

cleaning running continuously.

We recognised that we could save

energy by changing the cleaning

method based on differential pressure.

This releases the cleaning pulse only

when the pressure difference gets

lower than the set limit. So far, the

process has withstood the Finnish

winter conditions, and the cold has

not affected the cleaning method.

Photo: Example dust filter at Sotkamo plant.

Changes were implemented between

April and June 2023 in 38 bag houses

in the Sotkamo Micro Talc plant, and

the compressed air consumption in the

instrument air network reduced 40% in

this period. We continue to monitor the

energy usage and expect to not only

deliver annual energy savings and CO

reduction, but also increase the lifetime

of wearing parts of the equipment used.

Across procurement, we expect

to drive benefits from better use of

vendor management, digital tools

including e-sourcing, cutting back

the number of raw materials that are

single sourced, and standardising

our procurement processes.

We see the combination of our growth

platforms, together with these material

efficiency programmes, delivering much

improved financial performance by 2026.

Another key enabler of our efficiency

is our sustainability focus. Our products

help customers do more with less

resources, for example, additives that

help adhesives instantly grip heavy

ceramic tiles without slipping, saving

end users materials, time and money.

Efficiency is also a foundational

requirement for sustainability

improvements in our own operations

and supply chain. This year, we made

further progress in this area, for example

in our Sotkamo plant, where we reduced

electricity consumption by changing

filter cleaning method, or a reduction

in water consumption in Ludwigshafen,

Germany, by transferring product line

to a different filter press utilising

different cleaning technology.

Our focus on efficiency has helped

us to achieve two of our four 2030

environmental targets, meaning we

are emitting less GHG and using less

water per tonne of production than

in our 2019 baseline year.

For detail about our sustainability strategy

and sustainability targets, see pages 29-44.

Throughout our operations, our global

process excellence teams have identified

over 60 projects that are beneficial from

both an efficiency and environmental

perspective. Their implementation

will drive delivery of both our cost

saving ambitions and our 2030

sustainability targets.

We also completed the multi-year

project to deliver one global ERP

programme. This provides a single

source of information including financial,

manufacturing and supply chain data on

the same system, cutting out duplication

and inefficiency. And we also updated the

Elementis corporate website, to improve

the end user experience, including

a more efficient customer interaction.

See our new website at: elementis.com

Elementis plc

Annual Report and Accounts 2023

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Key performance indicators

Our key performance indicators (“KPIs”) enable us to monitor our strategic progress.

Adjusted operating

cash flow ($m)

$105.3m

Adjusted Group profit

before tax ($m)

$84.4m

Adjusted operating cash

conversion (%)

106%

Adjusted operating

profit ($m)

$103.9m

Contribution margin (%)

49.4%

Adjusted operating

profit margin (%)

14.6%

Definition

The net cash flow from operating

activities less net capital

expenditure, but excluding

income taxes paid or received,

interest paid or received, pension

contributions net of current

service cost and adjusting items.

Definition

The Group profit before tax

after adjusting items, excluding

adjusting items relating to tax.

Definition

Adjusted operating profit divided

by adjusted operating cash

flow plus provisions and share

based payments.

Figures for 2021 and 2022 include

results for the Chromium business.

2023 exclude Chromium.

Performance

Further information can be found

on pages 150-153.

Link to strategy

Performance

Further information can be found

on pages 190-191.

Link to strategy

Performance

Further information can be found

on pages 190-191.

Link to strategy

Performance

Further information can be found

on pages 190-191.

Link to strategy

Performance

Further information can be found

on pages 190.

Link to strategy

Performance

Further information can be found

on pages 58.

Link to strategy

Definition

Profit derived from the normal

operations of the business after

adjusting items.

Definition

Revenue less all variable costs,

divided by revenue, expressed

as a percentage.

Definition

Adjusted operating profit divided

by revenues.

Link to remuneration

No direct link.

Link to remuneration

Key element of the bonus plan

for the Executive Directors.

Further information can be found

within the Directors’ Remuneration

report on pages 101 and 113.

Link to remuneration

No direct link.

Target

Three-year average operating

cash conversion of over 90%.

Link to remuneration

No direct link.

Link to remuneration

No direct link.

Target

2026 adjusted operating profit

margin of 19%+.

Link to remuneration

No direct link.

2023

2022

2021

76.0

64.2

105.3

2023

2022

2021

59.6

80.9

84.4

2023

2022

2021

106

2023

2022

2021

88.0

100.5

103.9

2023

2022

2021

12.4

13.6

14.6

2023

2022

2021

46.6

47.3

49.4

Financial KPIs

Elementis plc

Annual Report and Accounts 2023

Total recordable

injury rate (“TRIR”)

0.33

Scope 1 and 2

GHG emissions (kt CO

63 kt CO

Environmental incidents

(Tier 2

)

Definition

We use the US Occupational

Safety and Health Administration

(“OSHA”) definition for recordable

injuries and illnesses. TRIR is

the total number of recordable

incidents multiplied by 200,000

divided by total hours worked by

all employees during the year.

Definition

Total Scope 1 and 2 (market

based) GHG emissions as

defined by the GHG Protocol.

Definition

We record and categorise

environmental incidents into tiers

based on the severity or actions

taken by regulatory authorities.

Tier 1 incidents are those that have a

significant impact on the environment

and require reporting to an external

authority and where enforcement

action is likely. Tier 2 incidents

have a minor impact and require

notification but are likely to result

in minimal action by the authorities.

Link to remuneration

Non-financial targets within the

Executive Directors’ annual bonus

structure typically include a

component of individual objectives

relating to safety performance.

See page 114 for detail.

Link to remuneration

Non-financial targets within the

Executive Directors’ annual bonus

structure include a component

of individual objectives relating

to sustainability objectives.

See page 114 for detail.

Link to remuneration

Non-financial targets within the

Executive Directors’ annual bonus

structure include a component of

individual objectives relating

to safety performance.

See page 114 for detail.

2023

2022

2021

0.90

0.67

0.33

2023

2022

2021

75.2

2023

2022

2021

Adjusted return on

operating capital employed

(%)

15%

Definition

Adjusted operating profit divided

by operating capital employed,

expressed as a percentage.

Operating capital employed

comprises fixed assets (excluding

goodwill), working capital and

operating provisions. Operating

provisions include self-insurance and

environmental provisions but exclude

retirement benefit obligations.

2023 return on capital employed

(“ROCE”) including goodwill

was 9% (2022: 9%).

Link to remuneration

ROCE is an underpin for the

long term incentive plan.

Further information can be found

on page 102.

Target

2026 ROCE of over 20%.

This is equivalent to over 12%

ROCE including goodwill.

2023

2022

2021

Average trade working

capital to sales ratio (%)

25.1%

Definition

The 12 month average trade

working capital divided by revenue,

expressed as a percentage.

Trade working capital comprises

inventories, trade receivables

and trade payables. It specifically

excludes prepayments, capital

or interest related receivables

or payables, changes due to

currency movements and items

classified as other receivables

and other payments.

Link to remuneration

Key element of the bonus plan

for the Executive Directors.

Further information can be found

within the Directors’ Remuneration

report on pages 113.

2023

2022

2021

17.7

22.5

25.1

Performance

Further information can be found

on pages 191.

Link to strategy

Performance

Further information can be found

on pages 45-46.

Link to strategy

Performance

Further information can be found

on pages 39-41.

Link to strategy

Performance

Further information can be found

on pages 46.

Link to strategy

Performance

Further information can be found

on pages 190.

Link to strategy

Non-financial KPIs

1 No Tier 1 incidents recorded.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Stakeholder engagement

The Board has considered the interests of stakeholders throughout the year.

How we engage

Continuous customer dialogue helps

inform our innovation, which aligns

with market trends

Provide technical support services

to our customers: an established

global key account programme

enables us to focus on deepening

our customer relationships

Continuous feedback loop with

key large customers drives more

sustainable, innovative products that

will meet their needs, strengthening

partnerships and collaborations

Participation and launching of new

products at conferences and trade

shows, and active participation in

Industry associations

Actions and outcomes

Launched 12 new products

28 innovation projects in development

$51 million new business won

$16 million spend on R&D and

technical support

Customer support trainings was

approximately 50 formulators trained

per month

$97.5 million total Innovation sales

Read more on pages 45-50.

Customers

Our customers rely on us to deliver

high quality products with superior

performance, efficiency and

sustainability features. We deliver

a range of products to customers

around the world and, by providing

expertise and innovation, we keep

our customers at the forefront of

their industries.

What matters to them

Customer service and performance

Supply reliability and quality

Responsible investment

Affordability and value

Suppliers

A resilient and ethical supply chain

is critical to our business. We rely

on our suppliers to be able to meet

the needs of our customers so that

we can meet our growth opportunities

and portfolio potential.

What matters to them

Responsible supply chain

Sustainability

Collaboration

Employees

Our employees are crucial to the

success of our business, and many

of our decisions have an impact on

them. Our employees want to feel

valued and empowered to make

a difference. A safe, ethical and

sustainable workplace with the

possibility of creating real impact

remain important hallmarks of our

employee proposition.

What matters to them

Health, safety and wellbeing

Diverse and inclusive workplace

Fair pay and reward

Opportunities for learning

and growth

Elementis plc

Annual Report and Accounts 2023

How we engage

Environmental and social reporting

on our website, including corporate

responsibility, modern slavery,

gender pay, water stewardship

and carbon emissions

Philanthropy and employee-matched

funding for charity policy

Local volunteering activities

Carbon Disclosure Project (“CDP”),

UN Global Compact (“UN GC”)

communication on progress

Local biodiversity initiatives such

as recycling rainwater for banana

plantations in Brazil

Actions and outcomes

Water Stewardship Policy

Volunteering and fundraising activities

Gold rating from EcoVadis and

B rating for CDP Climate and Water

Alignment with UN Sustainability

Development Goals (“UN SDG”)

Read more on pages 51-53.

Communities and

the environment

Engagement helps us to understand

our impact on wider society and the

ways in which we can work together

to make a valuable difference.

What matters to them

Local employment

Economic contribution

Operational impact and disruption

Environmental considerations

Investors

As owners of the Company, it is

important to engage actively and

listen and respond to investor

feedback throughout the year.

What matters to them

Successful delivery of our strategy

and financial targets

Transparent and regular updates

Capital generation and

shareholder returns

Robust governance practices and

responsible corporate citizenship

Government, trade

bodies and regulators

Engagement with governments and

local regulatory authorities helps to

ensure we understand changing

regulatory requirements and can

maintain a constructive dialogue

to meet these requirements.

What matters to them

Governance and compliance

Trust and transparency

Environmental impact

Sustainable procurement

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Fit for the Future organisational restructuring

S.172(1) considerations

How the restructuring would be

perceived by the global workforce and

uncertainty it might bring to staff during

the transition period

The long term financial benefits to the

Group and a wide range of stakeholders

The Board’s role

Following the sale of the Chromium

business, the Board felt it was the right

time to focus on creating an organisational

design that would make the Company

more financially and operationally resilient.

An external consultancy, Q5 Partners, was

selected to help transition the business to a

new operating model and ways of working,

making Elementis Fit for the Future.

The Board began to evaluate the detailed

design proposals for the project during

Q1 2023, including ensuring that the

Group’s innovation and commercial

capabilities would be protected, and

approved the announcement of Fit for the

Future in Q3 2023. The new organisational

structure for the Group is expected

to be completed during 2025. Changes

announced include the creation of

a simpler and more efficient organisational

structure based around our three

regions; the opening of an R&D unit

and global centre of excellence in

Porto, Portugal; and the outsourcing

of several financial processes.

As a result of the proposed changes,

the Cologne site, in Germany, will close.

Full consultation took place with the

Dutch and German works councils

and the Finnish shop stewards, with the

appropriate agreements finalised and

communicated to employees during

January 2024.

Key stakeholders identified

Employees

Customers

Suppliers

Communities and the environment

Investors

Key decisions in the year

Reintroduction of dividend

S.172(1) considerations

Importance of dividends for long-term

success of the Company

Important element of the Group’s

investment case for investors

Expectations of shareholders to be

taken into account

Ensuring the company had sufficient

resources to continue supporting

customers and employees, whilst

maximising opportunities

Broader economic uncertainty

and the potential medium and

longer term impact on the group

Ensuring there would be no material

impact on the security of the Elementis

Group Pension Scheme

The Board’s role

The Board is regularly updated on the

Company’s performance and its capital,

funding and liquidity position.

Following the recovery from COVID-19

and strengthening of the balance sheet,

the Board discussed the possibility of

declaring a dividend for the full year.

The Board has recommended a dividend

of 2.1 cents per share in respect of the

2023 financial year, and will be put to

shareholder approval at the AGM

on 30 April 2024.

Key stakeholders identified

Employees

Investors

Section 172

To be able them to fulfil their duties when

making decisions, it is essential that our

Directors understand what matters to,

and the impact on, our stakeholders

and, equally, that it is not always possible

to provide positive outcomes for all

stakeholders when considering the long

term success of the Company. Details

of our stakeholder groups and how the

business and the Board have engaged

with them during the year are set out

on pages 26-27.

The Board receives information on

stakeholder engagement matters through

regular reports and presentations from

senior management throughout the year.

All Board papers for principal Board

decisions include a specific section on

s.172(1) and stakeholder interests. In

addition to s.172(1) duties, there are also

other factors that are taken into account or

may be considered relevant in the context

of decision making: for example, pension

scheme members or engagement with

regulatory authorities, as well as an

overarching governance framework which

includes Group policies and the Code of

Conduct. Directors bring additional value

by sharing knowledge or insight gained

from other previous or current roles.

The Board visited several of our sites

during 2023 (Hsinchu (Taiwan), Livingston

(Scotland) and Songjiang (China)).

These visits provided opportunities

for our employees to engage with the

Directors during their tours of the sites,

management overview presentations and

social events with the Board. In addition,

the Directors engaged directly with our

investors (see page 78 for more detail)

and participated in a wider programme

of engagement with our employees.

Christine Soden, our Designated

Non-Executive Director (“DNED”) for

Workforce Engagement, ensures that the

views and concerns of the workforce are

brought to the Board, understood and

taken into account. Further information on

our approach to workforce engagement

can be found on pages 80-81.

Elementis plc

Annual Report and Accounts 2023

Sustainability

Overview

Guided by our purpose – unique chemistry, sustainable solutions – we strive to use our

expertise to shape positive outcomes for the world. Our product innovations and responsible

management of natural resources help us to create better additives that help our customers

meet their own sustainability and performance ambitions.

We support the UN SDGs and are committed to maintaining a business which contributes to

their delivery. We are a signatory to the UN GC and our annual communication on progress

is available on their website. We are committed to slavery-free supply chains. Our Board of

Directors approves our annual Modern Slavery transparency statement, available on our website.

Total recordable injury rate

vs 2022

50%

Women in senior

leadership positions

37%

Revenue share from products that

are natural or naturally-derived

68%

2030 environmental targets

met in 2023

2 / 4

Absolute GHG emissions (combined

Scopes 1 and 2 market based) vs 2022

6 .7 %

Purchased electricity from renewable

or low carbon sources

77%

We have reported with reference to the Global Reporting Initiative Standards (“GRI”)

for the period 1 January 2023 to 31 December 2023, and to Sustainability Accounting

Standards Board (“SASB”) chemicals sector standards. How we identify ESG topics

of material importance is described on page 31.

GRI content index: page 195

SASB index: page 197

Reporting

approach

EcoVadis rating

Gold 75/100

Medium risk A Constituent member

Climate

Water

We believe that transparency on risks, actions and data is crucial to demonstrating sustainability improvements and we support

various external rating agencies in their assessment of our performance. Our CDP disclosures are available on both our website and

CDP’s website. In 2023, we again achieved EcoVadis Gold, further improving to reach the top 2% of companies rated by EcoVadis.

Our ratings from Sustainalytics, MSCI and FTSE4Good were unchanged from 2022.

2023 sustainability highlights

Third-party ratings

1 ISO16128definition.2022:67%;2021:65%.Prioryearsrestatedafterreclassificationofsomeproducts.

Elementis plc

Annual Report and Accounts 2023

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Sustainability

Overview

continued

Progress against our 2030 environmental intensity targets

2030 Target

25%

Combined Scope 1

and Scope 2 market

based emissions

(tonne CO

e/tonne)

20%

Energy from fuels

(GJ/tonne)

10%

Water withdrawal

/tonne)

10%

Waste sent to

third parties

(tonne/tonne)

Performance

vs 2019 baseline

42 %

Target exceeded

0. 5% 16%

Target exceeded

Performance

2023 vs 2022

16% 4% 2% 10%

We met two of four 2030 environmental targets (GHG intensity and water withdrawal intensity in 2023 (2022: two

)). Our environmental

performance in 2023 was impacted by product mix, with relatively higher volumes of higher intensity chemical products and lower

volumes of lower intensity mineral-based products compared with 2022. In addition, our improvement projects this year were not of

large enough impact to counteract the mix effect. In addition, our GHG intensity reflects the first full year of high volume operation at

our Taloja, India. This site had a particularly negative impact due to the high emission electricity grid in the country. Sourcing clean

electricity for the site is one of the largest single actions we can now take to lower emissions intensity and absolute emissions further.

In 2024, we plan to refresh our sustainability targets to ensure we continue to improve. This activity includes setting a SBT for GHG

emission reductions for all three scopes via the SBTi. We will also define new targets to cover specific aspects of our value chain.

Strategy

We recognise that it is important for our business to create value for all our stakeholders, and successfully doing so improves the

performance and resilience of our business. Our strategy of Innovation, Growth and Efficiency captures the opportunities that come from

making sustainability improvements. We continue to grow our capabilities to better assess sustainability risks and opportunities – using

industry standard approaches and tools – to help guide our priorities and decisions and communicate our impacts in a balanced way.

Innovati o n

We focus our capabilities on finding

unique solutions to emerging

sustainability challenges. For

example, our organoclay-based

gels improve the water resistance of

consumer sunscreens, increasing

their effectiveness and ensuring

they stay longer on the skin.

Growth

Many of our products are well-

established in end-use applications

that already improve sustainability

outcomes, and we aim to increase

our participation in these

applications further. Examples

are the use of our talc for vehicle

pollution control ceramics and our

additives for paints with low VOC.

Efficiency

Our products help customers do

more with fewer resources, such

as additives that help adhesives

instantly grip heavy ceramic tiles

without slipping, saving end users

materials, time and money. Efficiency

is also a foundational requirement

for sustainable improvement in our

own operations and supply chain.

1 All targets are per tonne of production and have a 2019 baseline year.

2 After correction of 2022 waste data due to internal methodological standardisation.

Elementis plc

Annual Report and Accounts 2023

Reducing GHG emissions Becoming more natural Improving product safety

Driver: Climate change

Our focus is on lowering GHG

emissions throughout the value chain.

We are committed to setting an SBT,

covering Scopes 1, 2 and 3, and plan

for validation of this target in 2024.

We also work to increase our resilience

to the risks climate change brings.

Driver: Resource efficiency and

lowering environmental impacts

We work to increase our use of natural,

renewable and recycled raw materials.

Nature supplies many of our raw

materials, so we focus on reducing

environmental impacts.

We aim for a more circular and efficient

use of resources in our own operations,

for customers and for end-users.

Driver: Products that have

lower health risks

We work to find ways to lower the

hazards associated with the use of

our products, including substitution

with lower risk materials.

We can also help our customers

formulate new products with less

risk for end-users.

Example

Our site in Sotkamo, Finland, has

replaced the use of polluting heavy

fuel oil with new equipment that uses

cleaner liquified petroleum gas (“LPG”).

We completed our first set of product

carbon footprints, based on ISO

14040/44 standards.

Example

Our bio-based defoamers replace

fossil-derived chemicals and offer

better performance.

We are introducing aluminium

metal from factory wastes in

our antiperspirant actives,

replacing virgin metal.

Example

We have developed a new additive

for clear sealants that helps

formulators replace phthalate

containing plasticisers.

Our natural hectorite clay can be

used to replace synthetic ingredients

in skin care products.

To respond to the sustainability drivers in the markets we serve, we focus on a three pillar framework: environment, people and

responsible business.

We are reliant on our greatest asset, our people. We have

a particularly strong focus on employee safety and engagement

and ensuring a diverse, inclusive culture.

See pages 45-50 for detail.

We conduct ourselves with integrity, giving transparency to

stakeholders, sourcing responsibly, and engaging our value

chains to better address our material topics.

See pages 51-53 for detail.

Environment

People Responsible business

Example

Continued focus on our TogetherSAFE employee safety

program has brought steady improvements in our total

recordable injuries rate.

We continue to improve our senior leader gender diversity.

Example

Continuously improving our screening systems for customers

and suppliers to better manage risks.

Improving our cyber security processes to better secure our

data systems.

See pages 34-41 for detail. See pages 42-44 for detail. See pages 52-53 for detail.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Sustainability governance

Oversight of our sustainability strategy,

risks and opportunities, and progress is at

Board level. Our Board has a diverse set of

skills and experience (page 87), helping

to embed sustainability and climate related

considerations into our strategy in a

balanced way. At Board level, the standing

CEO’s report highlights progress in

sustainability (including against our

climate strategy and related risks and

opportunities), with further detailed

management updates provided on a

bi-annual basis. This year, these included

improvements to sustainability risk and

opportunity assessment methods for

our product portfolio and supplier base,

and progress on calculating product

carbon footprint and life-cycle analysis.

The governance of sustainability

and climate risks and opportunities is

integrated into our overall risk management

framework, with the Audit Committee

having oversight of our sustainability

and climate risk processes and disclosure

recommendations through internal

audit reports and management

prepared materials.

Our CEO has ultimate accountability for

our strategic response to sustainability,

including climate related risks and

opportunities. The CEO and ELT approve

the sustainability programme and provide

senior level support to the Sustainability

Director and Environmental Sustainability

Council (“ESC”) to embed sustainability

and climate action across the business

via project and business teams.

Progress towards our 2030 environmental

targets (see page 30) is part of the

performance objectives of both the CEO

and Chief Financial Officer (“CFO”)

(see page 114). The ELT members are

responsible for delivering aspects of our

sustainability and climate strategy and

managing related risks and opportunities.

The Sustainability Director is responsible

for driving our overall sustainability

strategy, providing the Board and ELT with

formal updates biannually, and chairs the

ESC. The Sustainability Director works with

the Head of Risk and Controls to integrate

sustainability and climate related risks into

the broader enterprise risk picture. The

ESC meets monthly, oversees progress

and identifies further necessary actions

on sustainability and climate related topics.

Sustainability and climate governance

Board

Executive Leadership

Team

Environmental

Sustainability Council

Climate related

working groups

Remuneration CommitteeAudit Committee

Internal Audit

Risk & Control

Management

Sustainability

Overview

continued

Elementis plc

Annual Report and Accounts 2023

Early in 2022, we conducted a materiality

assessment to help us identify the

sustainability issues that matter most

to our stakeholders (such as customers,

investors, regulators and our employees).

Full details of the process we followed

are in our Annual Report 2022.

We considered issues highlighted by

leading institutions, such as the UN SDGs,

the UN GC and the SASB. We also

considered if there were additional issues

arising from stakeholder feedback and

emerging from our core business strategy.

We weighted the issues for importance to

stakeholder groups and for the resilience

of our business. The outcome was used

to confirm our sustainability priorities

across our global business. For example,

following our materiality assessment,

we have committed to set an SBT

for GHG emissions reduction.

Sustainability

Materiality and strategy

We aim for our strategic priorities to maximise beneficial impacts and minimise

negative impacts to society and the environment. To do this, our priorities must

reflect the full reality of the world in which we operate.

Our material topics and matrix

Medium Stakeholder importance High

Medium HighBusiness impact

Targeted activities Best practice/risk management

Environment

GHG emissions

Ecological impacts

Water management

Customer sustainability solutions

Energy management

Waste and hazardous

material management

Air emissions

Product design and

life-cycle management

UN SDG supported

People

Labour practices

Community relations

Employee health, safety

and wellbeing

Employee diversity, inclusion

and engagement

UN SDG supported

Responsible business

Business ethics

Management of regulatory aspects

Product quality and safety

Responsible supply chain

management

Competitive behaviour

Data security

Efficient and resilient supply

of raw material

Critical incident risk management

Physical impact of climate change

UN SDG supported

Communicate actions/plans widely

Listen sensitively

Opportunities to generate wide ranging

value/benefits with proactive, innovative

action plans and frequent dialogue

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Climate strategy

Climate change shapes our product

designs as customers demand new and

increasingly impactful product benefits.

It drives our actions to reduce emissions,

and to improve the environmental footprint

of our products. In addition, the uncertain

effects of climate change mean our value

chains must be more resilient and agile.

Our ambition is to reach Net Zero by 2050

at the latest. Our priority is to minimise

emissions as much as possible, before using

sequestration offsets for remaining hard-to-

abate emissions. We do see a medium-term

path for us to reduce Scope 1, 2 and 3

emissions in line with Paris climate agreement,

and are committed to setting an SBT via the

SBTi. We will finalise our SBT in 2024.

Beyond our planned SBT, we recognise

that to decarbonise many of our own high

temperature processes – and those of

our suppliers – new technologies such as

renewable fuels or carbon capture need be

commercialised in the locations where we

operate. There is significant uncertainty

about these technologies and therefore,

today, we are unable to specify the balance

between sequestration offsets and low

emissions technology that we can use to

achieve Net Zero. We expect our Net Zero

ambition to cover Scope 1 and 2, and

we leave open the possibility of including

Scope 3 as our approach matures.

Governance

The Board oversees our climate related

strategy and reviews progress against

our climate targets with quarterly written

updates. The Audit Committee has

oversight of our climate related risks and

opportunities process and disclosure

recommendations through management

prepared materials. Our CEO has ultimate

accountability for our strategic response to

climate related risks and opportunities. For

more detail about our approach to climate

and sustainability governance, see page 32.

Strategy

Net Zero transition plan

We are taking immediate actions in

the short term to lower Scope 1 and 2

emissions, improving energy efficiency

through operational gains and equipment

upgrades. Our low carbon electricity

purchases involve purchasing renewable

or nuclear energy certificates.

Delivering on fuel switching opportunities

(including full or partial electrification)

is important. We are electrifying a large

fossil fuel-based process at our Sotkamo,

Finland, site. The new process can utilise

both LPG and electricity. The site already

sources low carbon electricity. If we find

we can run on 100% electricity, this has

the potential to prevent approximately

3,000 tonnes of CO

e emissions per year.

Securing more clean electricity through

high quality contractual agreements –

subject to local market conditions – is key.

It is especially important for our new site

in Taloja, India, which had its first high

volume operating year in 2023, and thus

made a substantial addition to our

emissions footprint (an extra 7,500

tonnes CO

e compared to prior year).

Our Scope 3 emissions will benefit from

product design improvements and portfolio

management opportunities that result in

products with a lower carbon footprint,

supported by life-cycle assessments and

supplier collaborations. Our own operational

gains such as energy efficiency, logistics

efficiencies and waste reduction also help.

Longer term, we have high uncertainty

about the availability of renewable fuels

and carbon sequestration technologies,

both for our own operations and for our

diverse global supplier base. We need such

technologies to meet the 90-95% emissions

reduction required for a science-based

Net Zero target under the SBTi framework.

Therefore, we take a pragmatic position,

where an SBT commitment drives our

medium term actions to lower emissions

Sustainability

Climate

NGFS Scenario descriptions

Characteristic Net Zero 2050 Delayed transition Current policies

Summary Limits global warming to 1.5°C

through stringent climate

policies and innovation,

reaching net zero CO

emissions around 2050.

Global annual emissions do not

decrease until 2030. Strong

policies are then needed to

limit warming to below 2°C.

Negative emissions are limited.

Only currently implemented

policies are preserved,

leading to higher physical risks.

Policy ambition 1.4°C 1.6°C 3°C+

Policy reaction Immediate and smooth Delayed None

Technology change Fast Slow then fast Slow

Carbon sequestration Medium then high use Low then medium use Low use

Regional policy variation Medium High Low

in line with science, while allowing time

for new technologies outside our control

to develop further.

The focus areas and external

dependencies in our transition plan

are summarised on the following page.

Climate scenarios

To help us with our climate planning,

we conducted an annual climate scenario

analysis. We use climate scenarios defined

by the Network for Greening the Financial

Systems (“NGFS”). NGFS is internationally

recognised for its work to advance

climate science and contributes to the

Intergovernmental Panel on Climate

Change’s (“IPCC”) work. NGFS has

defined seven future scenarios that explore

possible economic and financial impacts

of climate change. We selected three of

these scenarios for analysis – Net Zero

2050 (“NZ”), Delayed Transition (“DT”)

and Current Policies (“CP”). NZ and CP

represent very clear outer boundaries of

climate futures, allowing us to apply clear

differences in how we consider different

risks. We used the November 2023 NGFS

update in our scenario analysis. In 2021

and 2022, we used the Divergent Net Zero

scenario, but this is no longer available in

the NGFS data sets, so we substituted it

with DT scenario. We expect DT to be a

more likely description of the future than

NZ and CP. These scenarios are

summarised in the table below.

Elementis plc has complied with

the requirements of LR 9.8.6(8)R

by including climate related financial

disclosures consistent with the Task

Force on climate-related Financial

Disclosures (“TCFD”) recommendations

and recommended disclosures. The

climate related financial disclosures

made by Elementis plc comply with

the requirements of the Companies Act

2006 as amended by the Companies

(Strategic Report) (Climate-related

Financial Disclosure) Regulations 2022.

Elementis plc

Annual Report and Accounts 2023

Net Zero transition plan

We continue to work towards

our 2030 goals, with the

followingpriorities:

Continue to implement

energyefficiency

improvements

Further increase our

purchase of renewable

and low carbon electricity

Finalise decarbonisation

plans for each

manufacturing site

Inoursupplychain,we:

Continue to implement

product designs that

use recycled or reused

raw materials, such as

bio-based chemicals to

replace petrochemicals

and using waste aluminium

to replace virgin metal

Will increase supplier

engagement to understand

their emissions and

associated reduction

opportunities, particularly

for key raw materials and

logistics providers

Forourcustomers,we:

Continue to market and

innovate products that help

our customers and end

consumers to use fewer

resources and less energy

Will generate cradle-to-

gate life-cycle analysis

for our products, to

help us quantify their

environmental impacts

and communicate

improvements we make

Dependencies

Supply of low carbon

electricity and steam at

Ludwigshafen, Germany,

and New Martinsville, US,

is also subject to our

landlord’s energy

purchasing strategy

Quality and performance

requirements could limit

the amount of recycled

or reused content we can

incorporate into products

Global market demand for

solutions that bring more

sustainable outcomes

To meet our SBT, we will

further extend our focus areas.

Inouroperations,weplanto:

Expand fuel switching and

electrificationprojects

Strive for 100% renewable

or low-carbon electricity

purchases

Inoursupplychain,wewill:

Work with suppliers

to reduce emissions

associated with key raw

materials and logistics

Identify new bio-derived

and recycled/reused

materials

Forourcustomers,wewill:

Continue to innovate

products with lower life

cycle impacts, less

resource use and

improved functionality

Dependencies

The availability of high

quality low emission power

contracts in the locations

we operate

The decarbonisation extent

at our raw material suppliers

and logistics providers

Demand levels and

product mix effects

impacting activity volume

levels – especially

Scope 1 and Scope 3

As we move beyond an

SBT and closer towards

Net Zero, we will continue

activities described in the

short and medium term.

We will also investigate

the introduction of

new technologies.

Possibleadditionalactionsinclude:

Introduction of green

hydrogen or other

renewable fuels into our

hard to abate processes

Introduction of carbon

capture technology

downstream of our hard

to abate processes

Purchasing carbon

sequestration offsets

Reducing volumes

purchased from

suppliers with relatively

higher emissions

Dependencies

Development and

commercialisation

of renewable fuels and

carbon sequestration

technologies

Short term (2024 to 2026)

Medium term (2027 to 2034)

Long term (beyond SBT target year)

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

We annually review our material climate

risks with internal functional leaders,

informed by the different climate

scenarios. This allows us to identify new

or obsolete risks. It also allows us to create

a comprehensive picture of potential

climate related risks and opportunities

in each scenario, and the dynamics

over three time horizons: a) short term

(2024-2026, our three year business plan

period); b) medium term (2027-2034,

expected to be close to our SBT year); and

c) long term (beyond our SBT, reaching

our Net Zero ambition). With the functional

leaders, we also assess the impact and

likelihood of these nine risks over these

time horizons in each of the three climate

scenarios using our enterprise risk scoring

framework covered on page 64.

We initially assess climate risks through

a global perspective before bringing in

sector-specific or geographically local

considerations as necessary. Why they are

important to us, our risk assessment score

and our strategy to mitigate them are

described on pages 37-38, with additional

detail on impacts provided below. These

impacts should not be considered as

forecasts – we use these calculations to

understand a range of potential futures

and use them to inform our strategy and

tolerance to different climate risks.

The carbon pricing risk is highest in

2034 in the NZ and DT scenarios, before

dropping in the long term. This reflects

our underlying assumption that we will

maximise decarbonisation in line with

Net Zero requirements, minimising our

exposure in the long term. This results

in a highest theoretical annual cost of

$13.6 million around 2030 under the NZ

scenario. If we do not decarbonise at all,

and a global carbon price is introduced,

under the NZ scenario it could potentially

cost us $46 million by 2040, demonstrating

the importance of our decarbonisation to

mitigate this risk.

Energy prices increase in all scenarios,

with gas becoming relatively more

expensive compared to electricity in

the long term (especially in DT and NZ

scenarios). Our continued focus on

energy efficiency and opportunities to

decarbonise by replacing fossil fuels

with clean electricity help minimise

our overall energy cost increases.

Especially in the NZ and DT scenarios,

we expect that changing customer

demands are likely to increase

opportunities for our innovative and more

sustainable products, while not meeting

customer expectations, even in the short

term CP scenario, brings a high risk of

limiting our business. We are asked about

our climate strategy and product carbon

footprint by customers spanning all sectors

and geographies that we serve. Therefore,

we see more opportunities for our natural

and naturally-derived additives for personal

care products, for bio-based additives

replacing fossil-derived additives in

coatings applications and for our talc

additives used in plastics for vehicle

light-weighting. For examples, see our

strategy on pages 16-23.

On the consumer trends, we have potential

medium and long term exposure to

reduced fossil fuel demand in the NZ and

DT scenarios. For example, demand for

our organoclay additives for fossil fuel

drilling applications could slow if extraction

drops over time. Another risk is that

demand for our talc additives used in

combustion engine pollution control

ceramics could drop as new vehicle fleets

become increasingly electrified. In 2023,

revenue from our products directly related

to fossil fuel demand comprised 7% of our

revenues (2022: 6%). The NZ scenario

has the largest potential impact on these

revenues, with a 55% drop in primary

energy demand from fossil fuels by 2040.

In the short term, our growth platforms

target $90 million above market revenue

growth (see page 17 for details). These

growth platforms include short term

opportunities for talc in pollution control

ceramics, but do not include organoclay

additives for drilling applications. Thus, we

consider that the medium and long term

market opportunities we could access with

our portfolio would more than compensate

for the market risks we identified during

a low carbon transition.

To deliver to the market, we also need

a climate resilient operation. We assess

each of our sites for physical risks, in

discussion with local site leaders. Extreme

weather risks and high water stress already

exist due to their locations, and our sites

are already designed with these risks in

mind. Due to this built-in resilience, there

is low additional risk (medium under CP

scenario in the long term) expected as long

as we keep up maintenance. Additionally,

we do not think our supply chains are

overly exposed to suppliers or materials

from specific geographies.

Overall, our short and medium term

planning includes actions to ensure we

take climate related opportunities and

manage risks, including in:

Marketing, to allow early identification

of trends and opportunities

Our innovation pipeline and supply

chain management to deliver new

products with both improved

performance and sustainability impacts

Operational activities, such as energy

efficiency and decarbonisation projects

Based on this assessment, we believe

our strategy is fundamentally resilient to

market dynamics in different climate

scenarios (including a 1.5°C Net Zero

scenario), and other risks over short/

medium, long and extended periods,

and provides a solid foundation to

capitalise on climate related opportunities.

Material climate related risks for our business

Carbon pricing

Customer demands

Consumer trends

Investor demands

Raw material supply/prices

Access to renewable electricity

Energy prices

Water scarcity

Extreme weather events

Sustainability

Climate

continued

Elementis plc

Annual Report and Accounts 2023

Risk score

in horizon

Risk type Why the risk is important to us Scenario Short Medium Long Strategic mitigations

Carbon pricing

Transition A high carbon price could cause

a significant increase in operating

costs, making us uncompetitive.

CP Set an SBT to support our continued

Scope 1, 2 and 3 emission reductions

Continue energy efficiency and fuel

switching projects

Increase low carbon electricity purchases

Product price adjustments

Customer demands

Transition As part of their own climate

response and to lower their own

Scope 3 emissions, our customers

preferentially source products with

lower climate impacts than we

offer, resulting in lower revenues.

CP Climate and sustainability benefits

described in our product marketing

New product innovations

Finalise SBT and deliver on

GHG reduction plans

Develop product life-cycle analysis

Consumer trends

Transition Consumers change buying habits

to lower consumption or to lower

climate impact products than we

offer, resulting in lower revenues.

Technology or regulatory

developments may dramatically

alter the consumer market for

certain end-use applications

of our products.

CP Innovate to ensure we are well positioned

to address new market trends

Increase our high naturally derived content

in products

Ensure sustainable practices through

the supply chain

Maintain our portfolio diversity

Monitor revenues that are directly

dependent on fossil fuel consumption

Investor demands

Transition As part of their own climate

response, our investors place

capital in companies with better

sustainability and climate

credentials, increasing our cost

of capital or even limiting our

capability to invest in the business.

CP Clearly describe how our business strategy

supports climate mitigation and brings

commercial opportunities

Clear disclosure of our climate strategy,

metrics and progress

Meet our SBT commitment and achieve

Net Zero ambition

Engage with third-party rating agencies to

ensure we are fairly assessed on ESG

Raw material supply/prices

Transition Key raw materials have lower

availability, damaging our ability to

fulfil orders, potentially lowering

revenues, and/or higher raw

material prices mean our cost

base may become uncompetitive.

CP Qualification of multiple suppliers

Inventory management

Encourage climate resilience actions

at key suppliers

High risk Medium risk Low risk

1 Risk scores are estimated impact on Elementis multiplied by probability of occurrence.

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Elementis plc

Annual Report and Accounts 2023

Risk score

in horizon

Risk type Why the risk is important to us Scenario Short Medium Long Strategic mitigations

Access to renewable electricity

Transition Access to renewable/low carbon

electricity is a crucial lever for us

to make progress on our emission

reduction plans in the near term.

If demand outstrips supply,

we may find it too costly to use

renewable electricity, impacting

our competitiveness.

CP Investigate renewable/low carbon electricity

supplies with multi-year contracts

Assess opportunities to build additional

capacity exclusively for our use

Purchase a mix of renewable and nuclear

emission certificates to secure low

carbon electricity at a balanced price

Energy prices

Transition A high energy price causes

significant increase in

operating costs.

Our cost base may become

uncompetitive.

CP Energy purchase strategy that balances

spot, hedged and contracted purchases

Management of energy supplier contracts

Increased electrification to minimise

exposure to gas and liquid fuels

Energy efficiency projects

Water scarcity

Physical Our sites are disrupted by lack

of access to clean fresh water

for manufacturing product.

CP Projects to minimise water withdrawal and

improve water and effluent management

Some sites have access to their own

borehole for water supplies

Extreme weather events

Physical Our sites are disrupted due to

weather related factors, leading

to delayed order fulfilment

and potentially lower revenues,

while increasing our cost base

for repairs/prevention.

CP Continuous assessment maintenance

and investment in extreme weather

adaptations at sites

Supply chain and inventory management

to cover shorter duration disruptions

High risk Medium risk Low risk

1 Risk scores are estimated impact on Elementis multiplied by probability of occurrence.

Sustainability

Climate

continued

Risk management

Our climate risk management approach

is incorporated into our enterprise risk

management framework (detailed on

pages 63-71), and all nine climate related

risks identified through the climate

scenario analysis (described above)

are included in our Group risk register.

Some of these climate risks (for example,

extreme weather events) also contribute

to our principal risks.

The Audit Committee and Board

have oversight of our climate risk and

internal controls (pages 90-91) through

management prepared materials.

To ensure we do not over or under

emphasise climate related risks in relation

to other enterprise risks, we use the

same risk scoring framework as for our

enterprise risks. We annually reassess

our climate related risk scores under

each scenario and time frame with

our functional leaders.

Risk mitigations are monitored by the ELT

and delivered by the ESC-coordinated

working teams (such as Scope 1 and 2

emissions reduction) or by functional

teams (such as new product innovation

and product marketing).

Elementis plc

Annual Report and Accounts 2023

Metrics and targets

We have a range of established metrics

and environmental targets that we use to

address our climate related risks and

opportunities. Progress against our climate

and environmental targets makes up part

of the performance related remuneration

of our CEO and CFO (page 114).

The table below shows which of these

metrics and targets are relevant mitigations

for which of our climate related risks.

The table also shows which risk,

target and metric are most strongly

related with our Scope 1, 2 and 3 GHG

emissions, and where in this report to

find more information about our actions

and progress.

We continue to review our metrics and

targets in line with developing practices

and regulatory requirements. For example,

as we embed our use of climate scenarios

deeper into strategic processes,

we may introduce internal price of

carbon scenarios to help assess

capital investment projects.

GHG emissions

Our priority is to reduce absolute levels of

emissions – which is better for the planet

and all our stakeholders – and this is a

focus of our climate strategy to be Net Zero

by 2050. We have committed to set an

SBT to help keep our focus on emission

reduction over the medium term. Our GHG

emissions footprint is detailed on page 41.

In 2023, we prevented 799 tonnes CO

by replacing heavy fuel oil with LPG in

Sotkamo, Finland. Combined with lower

activity, we saw a 17.7% drop in Scope 1

emissions vs 2022.

There was no change in which sites

purchased clean electricity in 2023.

Renewable and low carbon (nuclear)

electricity made up 77% of our total

purchased energy during 2023

(2022: 77%). We continue to assess

opportunities to increase our purchase

of clean electricity, a key element of

our Net Zero transition plan.

Versus 2022, our Scope 2 (market based)

emissions increased by 3,979 tonnes

e, and Scope 2 (location-based)

emissions increased by 1,652 tonnes

e, driven by a higher activity at our

Taloja, India, site which uses relatively

high emission grid electricity.

Overall, our combined Scope 1 and

Scope 2 (market based) emissions

dropped by 6.7% vs 2022. A 19%

lower overall production volume was

counterbalanced by a product mix that

contained lower amounts of low emission

intensity talc output relative to our higher

intensity specialty chemical products,

and increased activity at Taloja, India.

Our target is to reduce our combined

Scope 1 and Scope 2 (market based)

emissions per tonne of production by 25%

by 2030, from a 2019 baseline (2030

target: 0.20). Our intensity increased to

0.15 tCO

e/tonne production (2022: 0.13).

Nevertheless, we met our 2030 target for

the third year in succession. This target will

be revised in 2025 when we set our SBT.

Climate related targets and metrics

Climate

related risk

2030 intensity target Business metric

Scope 1 and 2

GHG

emissions

Energy

from fuels

Water

withdrawn

Waste sent

to third

parties

Renewable

electricity

Value chain

emissions

Natural

content of

products

New

products

launched

Absolute

GHG

emissions

Carbon pricing

Customer demands

Consumer trends

Investor demands

Raw material

supply/prices

Access to renewable

electricity

Energy prices

Water scarcity

Extreme

weather events

emission scope

1,2 1 3 3 2 3 3 3 1,2,3

Additional

information

Page 41 Page 40 Page 42 Page 42 Page 40 Page 41 Page 29 Page 18 Page 41

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

In 2023, as we prepare for our SBT,

we expanded the process-based data

that we use in our highest contributing

Scope 3 categories of purchased goods

and transportation. 100% of direct raw

materials purchased now use specific

mass-based emissions factors from

a third party database (2022: 50%).

For transportation, we also use mode,

mass and distance for 100% of shipped

product and for an increased volume

of raw materials. We also took a more

pessimistic assumption about how our

products are treated at end-of-life.

Methodologies for other categories

were largely unchanged from 2022 –

our detailed methodology document

is available on the Sustainability section

of our website. Due to resource limitations

and absence of a current Scope 3

target, we have not recalculated

2022 Scope 3 emissions.

With these data methodology

improvements, our total Scope 3 emissions

were calculated to be similar to 2022

despite lower production volumes.

The largest single contributor is virgin

aluminium ingots (94,387 tonnes CO

– our work to introduce waste aluminium

can help lower these emissions.

We have screened Forest, Land and

Agriculture (“FLAG”) emissions across all

scopes. We estimated that 7% (43,000

tonnes CO

e) of our 2022 emissions

footprint are FLAG related. Over 99%

of our FLAG emissions are in Scope 3

Category 1, with the largest contributions

coming from castor and palm oil

derivatives. The balance falls under Scope

1 land use change at our own mines.

Given this result, we do not anticipate

setting a specific FLAG target as part

of our future SBT. Our 2023 emission

footprint includes all FLAG emissions

we have identified. This year, we have

obtained third party verification of our

Scope 3 emissions for the first time.

Third party verification

We commissioned TÜV SÜD,

an experienced and independent

verification body, to verify our 2023

data for Scope 1, Scope 2 location

and market based, Scope 3, energy

consumption, water withdrawal and

waste generation. GHG emissions

were verified regarding compliance

with the ISO 14064-1:2018 standard

using a reasonable level of verification.

TÜV SÜD’s full verification statement

is available on our website.

Energy

We recognise that responsible usage

of energy (whatever the source) reduces

demands on resources and infrastructure

and helps lower our costs and emissions.

Our 2030 target aims to reduce our energy

use from fuels per tonne of production by

20%, from a 2019 baseline (target: 1.52).

In 2023, 83% of our energy from fuels

came from natural gas (2022: 85%).

In 2023, sites continued to improve energy

efficiency, for example:

Our Sotkamo, Finland, site introduced

a fuel switching project to convert from

fuel oil to LPG for a key drying process

Our sites in Songjiang, China, and

Livingston, UK, fixed compressed air

leaks across the sites, saving almost

2,000 GJ of energy (annualised)

Our site in Livingston, UK, introduced

heat recovery to pre-heat a boiler

feed, saving an estimated $40,000

(annualised)

In total in 2023, we spent $386,000 of

CAPEX on energy efficiency projects

(2022: $73,000) to save an estimated

9,000 GJ of annual energy demand

(2022: 2,300 GJ).

Our total energy usage in our continuing

operations was 13.5% lower in 2023

compared with 2022, primarily due

to a drop in production volume, with

a contribution from our energy efficiency

projects. Our energy from fuels intensity

increased by 3.9%. This was primarily

due to product mix, with relatively lower

talc production. Talc uses relatively

low amounts of energy from fuel per

tonne produced compared with our

other products.

Examples of how we plan to improve

energy efficiency further in 2024 include

process optimisations in Songjiang,

China, motor upgrades in Ludwigshafen,

Germany, and electrification of a drying

process in Sotkamo, Finland.

Net Zero transition financial metrics

While many of our activities are attributable

to multiple drivers, we can attribute 1%

of 2023 CAPEX directly to our climate

response. This may increase over the

medium term as we work to decarbonise

our manufacturing sites. Our operating

costs directly related to climate change

include low carbon electricity premiums

and projects to enhance our emission

measurement capabilities. Compared

with total operating expenditure, these

costs are low (<0.5%). Our revenue

generating activities are not eligible for

current climate taxonomy frameworks.

However, our natural and naturally-derived

revenue metric is an indicator (page 29)

of how we generate value from renewable

rather than fossil-derived feedstocks.

Sustainability

Climate

continued

Global energy metric

% change

in year 2023 2022 2021 2020

2019

(baseline)

Total energy (GWh) -13.5 416.0 480.7 518.4 517.3 598.4

Total energy (GJ) -13.5 1,497,493 1,730,694 1,866,229 1,862,302 2,154, 225

Energy from fuels (GJ) -15.7 787,982 934,364 958,322 952,622 1,145,924

Purchased energy (GJ) -10.9 709,510 796,331 907,907 909,680 1,008,301

Purchased energy certified

renewable/low carbon (%) 0 77 77 72 0 0

Total energy intensity (GJ/tonne produced) 6.5 3.59 3.37 3.05 3.46 3.58

Energy from fuels intensity

(GJ from fuels/tonne produced) 3.9 1.89 1.82 1.57 1.77 1.90

Elementis plc

Annual Report and Accounts 2023

Global GHG metric

Scope 2 basis

% change

in year 2023 2022 2021 2020

2019

(baseline)

Scope 1 (tonne CO

e) -17.7 39,217 47,666 49,060 49,050 58,469

Scope 2 (tonne CO

e) Market 20.5 23,380 19,401 26,183 94,332 99,957

Location 3.8 44,608 42,956 53,447 60,501 64,457

Total Scope 1 and 2 (tonne CO

e) Market -6.7 62,597 67,067 75,243 143,382 158,426

Location -7.5 83,825 90,622 102,507 109,551 122,926

GHG intensity (total Scope 1 and 2

tonne CO

e/tonne production)

Market 16 0.15 0.13 0.12 0.27 0.26

Location 11 0.20 0.18 0.17 0.20 0.20

GHG intensity (total Scope 1 and 2

tonne CO

e/$m revenue)

Market -3 88 91 106 237 225

Location -4 118 123 145 181 175

Outside of scopes – GHG from

biomass (tonne CO

-4 3,850 4,011 5,165 5,732 6,301

Scope 3 GHG emissions by category (tonne CO

% change

in year

2023 2022

Purchased goods and services 21.0 386,217 319,208

Capital goods -31.6 15,338 22,421

Fuel and energy related -1.9 20,916 21,321

Upstream transportation -45.4 86,449 158,201

Waste generated -53.5 4,371 9,397

Business travel 0.1 4,779 4,772

Employee commuting -41.1 873 1,483

Upstream leased assets 29.7 191 147

Total upstream Scope 3 emissions -3.3 519,133 536,950

Downstream transportation 37.4 16,257 11,832

Processing of sold products Not calculated, not relevant – – –

Use of sold products Not calculated, not relevant – – –

Product end-of-life 212.0 31,698 10,159

Downstream leased assets 2.4 319 311

Franchises Not applicable – – –

Investments -17.3 95 115

Total downstream Scope 3 emissions 115. 8 48,368 22,417

Total Scope 3 emissions 1.5 567,502 559,367

Total Scope 1, 2 (market based), 3 emissions 0.6 630,100 626,434

Total Scope 1, 2 (location based), 3 emissions 0.2 651,329 649,989

UK only GHG and energy metric

2023

% of global 2023 2022 2021 2020

2019

(baseline)

Scope 1 (tonne CO

e) 13.6 5,350 7,726 7,74 0 5,866 7,735

Scope 2 (tonne CO

e) Market 4.2 973 321 2,712 2,686 3,026

Location 3.4 1,532 1,737 2,062 1,986 2,031

Total Scope 1 and 2 (tonne CO

e) Market 10.1 6,323 8,047 10,452 8,552 10,761

Location 8.2 6,882 9,463 9,802 7,852 9,766

GHG intensity (total Scope 1 and 2

tonne CO

e/tonne production)

Market – 0.48 0.42 0.52 0.53 0.56

Location – 0.52 0.50 0.49 0.48 0.51

Total energy (GWh)

8.8 36.6 51.3 51.4 40.9 50.4

Total energy intensity (GWh/tonne produced) – 0.0028 0.0027 0.0026 0.0025 0.0026

1 For further data breakdowns, see the environmental data tables on our website.

2 2022 data not recalculated with 2023 methodology due to resource limitations and absence of a specific Scope 3 reduction target.

3 1 GWh = 1 million kilowatt hours (kWh). Total 2023 UK energy was 36,631,594 kWh.

We calculate GHG emissions in line with the GHG Reporting Protocol. For GHG emissions and all other environmental metrics, we report with an operational control

boundary that aligns with our financial statements. For more information on our calculation approach, see our non-financial data reporting methodology document on

our website.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Our Health, Safety and Environment

(“HSE”) team manages environmental

compliance and performance is

monitored monthly by our manufacturing

organisation. Our ESC and the ELT reviews

performance of our strategic environmental

KPIs and major improvement projects on

a quarterly basis. Seven of our sites have

an environmental management system

certified to ISO 14001. Further information

on our environmental data methodologies

is available on our website.

Water

We see water as a precious natural

resource, and we continue to work to

mitigate our water use, risks and impacts.

Our target is to reduce water withdrawal

per tonne of production by 10% by

2030, from a 2019 baseline (2030 target:

3.38). Our Water Stewardship Policy is

available on our website. We have also

considered climate related water risks at

our sites (page 38). We publicly report

our water performance through CDP,

achieving a B rating in 2023 (2022: C).

Overall, our water withdrawal decreased

by 17% compared with 2022 (page 43),

primarily due to lower production volumes.

We met our 2030 target for the third year

in succession, although product mix

effects meant our actual intensity metric

was 2.5% higher year on year. We will

publish an updated water target alongside

our SBT in 2025.

We have worked to increase efficiency

of water use across our portfolio. For

example, we changed how we allocated

products to our filtering equipment in

Ludwigshafen, Germany, and were able

to save approximately 30,000 m

of water

withdrawal (annualised). We also located

and repaired a leak in our underground

supply pipe in Songjiang, China.

Our water discharge (page 43) is

significantly higher than withdrawals,

primarily due to groundwater and rainwater

management at our mines in Finland.

For the rest of our sites, discharge is

generally lower than withdrawal due to

process water being lost to evaporation

as we dry our products, and sometimes

shipped as part of a product.

We use the World Resources Institute

(“WRI”) Aqueduct tool to help us

understand water risks. This year,

our site in Newberry Springs, US,

has been newly classified as within a high

water stress area, along with our two

manufacturing sites in China (Songjiang and

Anji). Our water withdrawal intensity in those

areas was 6.1 m

per tonne produced in

2023 (2022: 4.1 m

per tonne produced).

Waste

We recognise how valuable resources

are and we aim to use them as efficiently

as possible to support a more circular

economy. To this end, our target is to

reduce the waste (including hazardous

waste) we send for third party treatment

per tonne of production by 10% by 2030,

from a 2019 baseline (2030 target: 0.032).

Sustainability

Environment

Ensuring we minimise the negative impacts of our activities on the natural world is crucial to how

we operate our business, helping the planet and supporting our own sustainable access to the

natural materials we require.

Photo: Our site in Sotkomo, Finland.

This site has prevented 799 tonnes of GHG

emissions and approximately 20 tonnes of SOx

emissions by executing a fuel switching project,

moving from heavy fuel oil to LPG, with future

potential to electrify the process.

We have re-baselined our data for

this metric as we better standardised

our data management of this KPI to

exclude wastewater trucked offsite at

two sites. Data from 2019 to 2022 has

been corrected.

Our waste per tonne of production

increased by 9.7% in 2023 (page 43).

We will publish an updated waste target

alongside our SBT in 2025.

We conducted activities to reduce our

waste, including at our Hsinchu, Taiwan,

facility where the recycling of process

residues and recycling of raw material

drum packaging saved over five tonnes of

waste (annualised). Future projects include

the potential reclassification of clay wastes

from our Livingston, UK, site as products

for use within agricultural and construction

businesses. If realised, this could reduce

our waste by thousands of tonnes. Similar

wastes from our Anji, China, site are

treated by our waste services provider

and then used in construction materials.

In 2023, 50% of our total waste sent offsite

for third party treatments was landfilled,

the majority of this being non-metallic

mineral wastes. 8% of waste was

incinerated and 41% was recycled or

reused. 8% of our waste was classified

as hazardous (2022: 4%).

Air emissions

We control the emission of dust and

gaseous pollutants – including VOC,

Nitrogen Oxides (“NOx”) and Sulfur

Oxides (“SOx”) – in compliance with our

local operating permits, using scrubbers

where necessary. Significant air emissions

are detailed on page 43. The large drop

in SOx emissions in 2023 is due to the

replacement of heavy fuel oil with

LPG at our Sotkamo, Finland, site.

Elementis plc

Annual Report and Accounts 2023

Water metric

% change

in year 2023 2022 2021 2020

2019

(baseline)

Total water withdrawal (m

) -16.7 1,310,825 1,573,678 1,700,117 2,048,730 2,254,182

Water withdrawal intensity (m

/tonne produced) 2.5 3.15 3.07 2.78 3.80 3.75

Water withdrawn from high water stress

areas (m

)

-8.4 188,033 205,248 308,809 291,866 223,422

Water withdrawn from high water stress

areas intensity (m

/tonne produced) 48.8 6.1 4.1 5.2 10.4 6.4

1 Newberry Springs, CA, US, was classified as in a high water stress area in the WRI Aqueduct tool for the first time in 2023. The site water withdrawal has been

added to 2019-2022 figures to aid comparison of trends.

Water metric (m

) All locations Water stressed locations

Water withdrawal by source Ground 248,877 48,461

Surface 185,539 103,531

Third party 876,410 36,041

Total water withdrawn 1,310,825 188,033

Water discharge by destination Ground 0 0

Surface 3,286,514 68,370

Third party 756,977 11,785

Total water discharged 4,043,491 80,156

Total water consumed -2,732,666 107,878

Waste sent for third party treatment

% change

in year 2023 2022 2021 2020

2019

(baseline)

Mass of hazardous waste (tonne) 70 1,276 750 293 – –

Mass of non-hazardous waste (tonne) -15.9 14,269 16,728 18,842 – –

Total waste (tonne) -11.1 15,545 17,478 19,135 19,704 21,297

Total waste intensity

(tonne generated/tonne produced) 9.7 0.037 0.034 0.031 0.037 0.035

Treatment method of waste

(tonne)

Hazardous

waste

Non-

hazardous

waste Total

Landfilled 138 7,664 7,802

Incinerated 1,126 185 1,310

Recycled/reused 12 6,420 6,432

Total 1,276 14,269 15,545

Emission to air (tonne) 2023 2022 2021

Sulfur oxides 0.5 24.0 33.5

Nitrogen oxides 19.5 29.6 37.3

Volatile organic

compounds 65.6 48.8 58.3

Hazardous

air pollutants 6.3 4.1 3.9

Particulate matter 1.7 2.5 20.3

Production volume (tonne)

% change

in year 2023 2022 2021 2020

2019

(baseline)

Global total -19 416,738 513,300 611,533 538,495 601,753

UK only -30 13,253 19,056 19,926 16,282 19,233

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Sustainability

Environment

continued

Responsible mining

We operate mines in Finland and

California, US, that give us direct access

to key mineral resources incorporated

into our products. We work to protect

the environment and nature, reducing or

avoiding our impact on sensitive species,

habitats and ecosystems. Our biodiversity

statement is available on our website.

We engage openly and constructively

with local communities, seek continuous

improvements in our practices,

and work to minimise negative impacts

of our operations.

Overburden, tailings and ore beneficiation

residues remain in tailing storage facilities

on our mine sites. Some of these materials

are sold as products, and there is further

potential for valorisation in the future.

Photo: Our California mine.

Finland

We operate four active open cast mines

for high purity talc minerals. Our talc mines

are members of the Finnish Network for

Sustainable Mining, which aims to advance

responsible mining practices, and we

are committed to the Finnish Towards

Sustainable Mining Standard.

We continuously monitor environmental

impacts with our own laboratories or

qualified third parties, including the

quality of groundwater and surface water.

We reuse the water from our tailings

storage facility in our ore processing,

minimising freshwater withdrawal and

resulting in a water recycling rate of

over 95%. As we mine, we pump out

accumulating groundwater and rainwater,

treating it before discharge.

As we process the talc ore, we produce

nickel concentrate and magnesite sand as

by-products, which are utilised in on-site

infrastructure or sold externally. We also

use rocks in road construction on site.

The land area actively mined at these

sites is 1,792 hectares. Our land

management and remediation plans

include consideration of landscape

value when designing landfill areas.

There are no endangered species

identified in our mining areas. The impact

of our mining activities on biodiversity

is monitored in compliance with local

operating permits and regulations.

Our permits are susceptible to challenges

from environmental lobbyists and where

this occurs, we work constructively with

the permitting authorities and follow legal

due process to defend our rights.

California, US

We operate one open cast mine in

California for hectorite clay mineral.

We can mine 220 hectares of land and

have additional claims (mineral rights)

on US federal land surrounding the

current operation.

By design and geological location,

no stormwater leaves the site.

Occasionally, rainwater in active mining

areas is pumped to other parts of the

property to evaporate while allowing

mining to continue. Water from an on-site

owned well is used for dust control, to

remain in compliance with the reclamation

plan and regional California Air Quality

Management District requirements.

All mined material is segregated such that

further uses can be found for it in future

(e.g. in agriculture, highway construction

or landfill liners). We sell a small amount of

rock as storm erosion protection and clay

for agriculture amendments and residential

pond liners.

Our mine is within the habitat range of the

Mojave Desert tortoise, which is on the

International Union for Conservation of

Nature red list as critically endangered.

We have an approved tortoise barrier

surrounding the site to prevent tortoises

entering the site. Should a tortoise be

found inside the fence, we work with

a trained biologist to return the animal

safely to its natural habitat.

Supporting reforestation

We partnered with Forestmatic to plant

a tree for every visitor who left a business

card at our marketing stand at a major

conference. We planted 275 trees in

Peru, supporting a project run locally

by Camino Verde. The local community

benefits economically from the resulting

non-timber products, and degraded land

is rehabilitated to a healthy forest.

275

Trees planted in Peru

Elementis plc

Annual Report and Accounts 2023

Our Values define our culture and guide

our journey. Safety is more than a

standard; it’s a way of life, showcasing our

unwavering commitment to our workforce’s

well-being. Our ambition is demonstrated

in our passion for excellence and our

drive to create solutions that bring value.

Respect is woven into all interactions,

whether with colleagues, customers,

communities or the environment. And

teams are the foundation of our success,

creating an environment where collective

efforts result in exceptional achievements.

Health and safety

Safety is a core value at Elementis.

Our focus is on keeping our employees

safe, protecting people, and operating

responsibly. Accountability for health

and safety is held by our CEO, supported

by the Senior Vice President (“SVP”)

Global Supply Chain and Manufacturing

and the Global Director for HSE. Our

Board receives a detailed update on our

health and safety performance at each

meeting and the ELT receives updates

monthly as part of the review of overall

Group performance.

Our health and safety strategic plan

reflects how we turn focus into action.

Our objective is to deliver excellence in

HSE performance and drive continuous

improvement through continual investment

in our people, management systems and

our facilities. A copy of our HSE Policy is

available on our website.

We operate a comprehensive management

system that supports our Values and

the delivery of our health and safety

programme TogetherSAFE. We

continuously develop key parts of the

management system. This year, we

expanded our development of a global

HSE framework and publication of HSE

standards in line with International

Organisation for Standardisation (“ISO”)

standards. We continued our safety

leadership certification programme for

new site management, certifying six new

leaders on performance, compliance and

risk management. We awarded our third

annual CEO TogetherSAFE Award to our

Huguenot and Wallkill (US) sites for their

safety initiatives in merging TogetherSAFE

and hazard recognition, expanding ‘Stop

Work Authority’ reporting, and increasing

the number of HSE champions.

We held our third annual Global Safety

Week in April, with all our sites uniting

globally to celebrate and nurture our safety

culture. Speakers covered topics on

wellness, sustainability and a shared

personal story on confined space hazards.

Organisational roles and responsibilities,

and mechanisms to communicate

information and data management

supporting the measurement and tracking

of HSE incidents, are operated under

our global HSE Leadership Council.

The Council meets monthly and comprises

functional and business segment

representatives spearheading the HSE

management system throughout the

organisation. All sites’ local management

systems are based on Plan, Do, Check,

Act principles to ensure sufficient

control and drive continual performance

improvement. Each manufacturing site

operates a safety committee covering

matters that impact employee health

and safety, performance, incidents and

concerns. All suggestions are tracked

as corrective and preventative actions.

To ensure compliance with our safe work

procedures and compliance with legislative

requirements, employees are given training

tailored to their specific job requirements

and required level of competence. Training

consists of both in-person and virtual,

with each site maintaining a training plan.

Safety critical training and competencies

are clearly identified and kept up to date.

Our corporate HSE team conducts

regular audits to determine compliance

with country and local regulations,

completing five audits (eight in 2022)

of our manufacturing sites.

Health and safety performance

Our total recordable injury and illness rate

was 0.33, compared with 0.67 in 2022.

There were four employee recordable

injuries (2022: eight). There were four lost

time accidents (“LTAs”) (2022: three).

Most of our employee injuries were

lacerations (32%) and sprains/contusions

(24%). Key improvement opportunities

identified from these incidents are risk

assessment of tasks before work

commences, overseeing work during

operations, safe lifting practices, early

reporting of symptoms, and adherence

to procedures and rules. There were zero

fatalities reported in 2023 (2022: zero).

At Elementis, our people are the key ingredients of our success. They are vital members of a local

team and a dynamic, global, inclusive company, and they play a pivotal role in bringing our purpose

to life – delivering unique chemistry and sustainable solutions to the world.

Sustainability

People

Total recordable injuries

2023

2022

2021

Total recordable injuries rate

0.33

2023

2022

2021

0.9

0.67

0.33

Total lost time injuries

2023

2022

2021

Contractor recordable injuries

2023

2022

2021

Total PSE Tier 1 and 2

2023

2022

2021

2021 and 2022 data excludes divested sites.

Process safety

Process safety management ensures that

systems and procedures are implemented

to prevent and control hazards associated

with toxic releases, fires, explosions,

uncontrolled reactions and energy releases

that can result in catastrophic incidents.

A formalised process safety management

standard was created in 2023 to guide

our plants in managing risk according to

requirements and best practices. Aligned

with the standard increased training in

process safety events (“PSE”), hazard

analysis, and defined competency

requirements, were conducted and a

process safety improvement plan for high

risk processes executed. Phase 1 of the

plan included sites identified as high

hazard, which were prioritised due to

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Contractor safety

A contractor is defined as a third party

contracted to undertake work on behalf

of the Company, or to provide a specific

service to the Company. All new

contractors are given HSE orientation prior

to commencement of work to understand

their on-site responsibilities and to ensure

compliance with our safe work procedures.

Each site conducts specific contractor

orientation, covering life critical rules,

safe work permitting, emergency

procedures and incident reporting.

Contractors deemed as high risk are

vetted by reviewing the suitability of

their programmes and training, and their

organisation for regulatory violations.

A contractor recordable injury is a work

related accident, meeting the definition

of recordable injury, that occurs to a

contractor while working at an Elementis

site. Contractor recordable injuries

decreased in 2023 to two (2022: four).

Focus for 2024

In 2024, we will continue implementation

of global HSE standards and framework

within the operations and develop

meaningful KPIs to support the rollout.

We will heighten engagement by

leveraging the success of initiatives

such as the TogetherSAFE CEO Award,

Global Safety Week and our ‘Call to Action’

initiative and embed process management

practices by continuing to drive execution

of the process safety improvement plan.

To reduce associated injury risks,

continued work is needed on ergonomic

assessments of our manual handling

tasks, promotion of hazard recognition,

work permitting and risk assessment

processes at all manufacturing sites.

We will support training of new HSE

leaders, and promote stop work

authority and near miss reporting.

overall risk (severity and frequency).

The plan included completion of

associated process hazard analysis

(“PHA”), management of risks raised in

PHAs and identification of deficiencies

in the maintenance of safety critical

equipment. Phase 2 will include the

remaining high risk locations as well

goal of 100% PHA coverage by 2025.

A PSE is an unplanned incident or accident

that occurs during the operation of a

chemical or industrial plant, where a

hazardous material is being used or

processed. We had two Tier 1 or Tier 2

PSEs in 2023 (2022: two). Both incidents

involved seal failure. One resulted in the

loss of primary containment to secondary

containment; the other a slow leak

over a period of several days. Corrective

actions implemented include upgraded

preventative maintenance plans and

increased visual inspections of

critical equipment.

In 2023, we had seven Tier 2

environmental incidents (2022: zero).

Our local incident response teams followed

procedures to recover the situation

and declared each incident to the local

authorities as soon as we became

aware of a problem. The two most

potentially impactful of these events

were caused by third party tampering of

a pipeline, and investigation is ongoing.

Four of the incidents have been closed

in collaboration with the authorities.

The root cause was either equipment

malfunction (three incidents) or failure

to follow procedure (one incident).

A thorough analysis of each incident was

conducted and learnings communicated

across our manufacturing network to

prevent future occurrences. The remaining

incident was an administrative error made

during an air permit renewal application.

In 2023, several of our sites celebrated extended periods of

safe operation.

90%

of sites had zero recordable

injuries for >1 year

52%

of sites had zero recordable

injuries for >3 years

The following sites celebrated significant milestones without

an employee recordable injury, showing strong employee

engagement in driving continuous improvements in safety

culture and taking responsibility for their own and others’ safety:

Katwijk (12 years)

Milwaukee (11 years)

Newberry mine (8 years)

Middletown (7 years)

Livingston (6 years)

Songjiang (4 years)

Palmital, Huguenot, Anji

(3 years)

‘Call to Action’ initiative

600 employees, 46 meetings and over

100 actions developed

Following an increase in incidents in the first half of the year,

all sites globally were requested to step up efforts to improve

HSE performance by engaging with employees, which sent

a clear message about the value we place on safety.

To ensure future occurrences are minimised, all sites

participated in small group sessions discussing the events,

suggesting areas for improvements, and documenting key

learnings for follow up sessions. Key improvement

areas identified included reducing risk from manual handling

tasks, improved employee and contractor training, better

oversight of work and permits, promotion of Stop Work

Authority (“SWA”), reporting near misses, and a continued

drive towards hazard recognition within operations.

Safety metric methodology

We use the US OSHA Regulation

definitionforarecordableinjury:

A work related accident or illness that

resultsinoneormoreof:death;lossof

consciousness;absenceofmorethan

oneday;medicaltreatmentbeyond

firstaid;restrictedworkortransferto

another job.

TRIR is the number of recordable

cases multiplied by 200,000 divided

by total hours worked by all employees

(including directly supervised

contracted/temporary employees)

over a calendar year. We exclude

contractors from the TRIR calculation,

separately tracking the number of

contractor recordable injuries.

A LTA is a work related injury or illness

that requires greater than three days

away from work (excluding the day of

the incident).

A Tier 1 or Tier 2 PSE involves loss of

primary containment with consequence.

It is an unplanned or uncontrolled

release of any material from a process.

Tier 1 has a higher magnitude of

consequencethanTier2,asdefined

in the American Petroleum Institute

Recommended Practice 754.

A Tier 1 or Tier 2 environmental incident

is a release of materials at a level in

breach of our permit limits that requires

notificationtotheauthorities.Tier1has

a higher magnitude of consequence,

either in impact or in remediation costs.

Sustainability

People

continued

Elementis plc

Annual Report and Accounts 2023

Employee headcount by gender and region

Effective as of 31/12/2023

Metric

Male

employees

Female

employees Total

Americas 293 110 403

Europe

326 128 454

Asia 320 103 423

Global 939 341 1,280

1 One employee chose not to disclose.

Our people

In 2023, we continued to promote and

further integrate our employee value

proposition – Connect, Grow, Make an

Impact – launched in 2022. These areas

were identified by our employees as our

core areas of strength. Connect – as our

people value the collaboration and being

part of a global team. Grow – as there are

plenty of opportunities to participate in

projects and gain new perspectives and

experiences. Make an Impact – because

everyone’s contributions are valued,

and our work has a meaningful impact.

Our policies and practices

Our HR policies demonstrate how

our values are put into practice. They

underscore our commitment to providing

equal opportunities in employment, striving

to ensure that the work environment is

free of harassment and bullying and

that everyone is treated with dignity and

respect. Our policies are available to all

employees via the company intranet and

local HR. Mandatory training is provided

to all employees.

While the Company has fewer than 250

employees in the UK and is therefore not

required to report under the gender pay

gap regulations, the Group reviews gender

pay globally on a biennial basis, with the

most recent one completed and reviewed

by the Board in December 2022. This

showed significant progress globally

with the UK data showing that female

employees were paid slightly higher than

their male counterparts. A further review

will take place in 2024.

We are committed to providing fair, market

competitive, pay and benefits to attract,

engage and motivate employees at all

levels. We aim to pay fully competent

individuals who consistently meet

performance expectations at competitive

market levels. We review benchmark salary

increase data on an annual basis and

complete a full survey every three years

to ensure we maintain this position.

We are accredited by the UK Living

Wage Foundation in respect of our pay

commitment to direct and third party

employees at all UK locations.

We provide a variety of leave programmes

to support employees through life events,

including family leave to care for sick family

members, paternity and maternity leave,

and bereavement leave. Leave entitlement

varies greatly across countries but the

offerings are all in line with or above

market norms.

In addition, each country offers multiple

forms of personal and family support which

aim to enhance work-life balance and

increase employees’ sense of well-being.

Examples are child education and

childcare support, meal allowance

or meal vouchers, on-site canteen,

transportation support, and gifts

for holidays and life events.

From our employee population, 7.3%

are union members and 28% are subject

to collective bargaining agreements

(data excludes Ludwigshafen, Germany,

where we have no right to this information).

Voluntary attrition reduced to 8.8%

(2022: 10.6%), well below manufacturing

industry benchmarks.

Metric 2023

Union membership 7.3%

Collective bargaining

agreement 28%

Voluntary attrition 8.8%

Human rights

Our approach to upholding human

rights is guided by international

conventions and standards, including

the UN Universal Declaration of Human

Rights, the UN Guiding Principles on

Business and Human Rights and the

International Labour Organization’s

Declaration on Fundamental Principles

and Rights at Work. We prohibit

the use of child and forced labour

throughout our supply chain. We are

committed to the principles of freedom

of association, equality of treatment

and non-discrimination.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Benefits and rewards

Our total rewards package goes beyond

competitive compensation and benefits.

It encompasses a safe and healthy work

environment, a commitment to work-life

balance, meaningful recognition and

continuous learning and development.

Guided by our global principles, benefit

programmes vary from one country to

another as government mandates, cultural

factors and market norms shape local

programme design and employee

expectations. These local offerings are

well aligned to and within the scope of

our global principles.

All countries offer some form of retirement

scheme, ranging from the employee

invested 401k plan in the US to wholly

state provided and cash lump sums after

retirement. In countries where state

programmes are at a basic level, the

Company offers private plans in addition

to the mandatory contributions to the

state programme.

Employees in all countries have access

to a government health plan, to which the

company contributes, and/or a company

sponsored plan. Employees in India, the

US and Brazil are provided with company

sponsored healthcare plans as there is no

national healthcare system or the coverage

is limited. In the UK and Germany, the

Company offers supplemental health

insurance in addition to mandatory

contributions to the national programmes.

The offering of a supplemental plan in UK

is above market norms as private medical

schemes are not common and only offered

by 10% of employers. Our new site in

Portugal will be set up on the same basis,

aligned to our global principles.

Sustainability

People

continued

A diverse and inclusive environment

Elementis strives to create a culture where

all employees feel safe, respected, valued,

and empowered to contribute ideas and

perspectives. We recognise that the

diversity of our people and the inclusive

nature of our culture are intrinsic to better

business decisions and fundamental to

the success of our strategy.

During the year, the Board has received

updates on Diversity, Equity and Inclusion

(“DE&I”) matters and has performed in

line with the Board Diversity Policy and

objectives. We have a Board composition

of 37.5% female Board members,

a Director from an ethnic minority

background and one of the four senior

Board positions occupied by a female.

By the end of 2024, we expect to reach

our goal of >40% female, surpassing the

requirements of the Women FTSE Leaders

and the Parker review. In 2023, we

ascended from 74th to 49th place in

the FTSE Women Leaders Review.

Additionally, we attained the leading

position within the Chemical sector.

Our DE&I Leadership Council, created

in 2020, is co-chaired by the CEO and

Chief Human Resources Officer (“CHRO”)

and is represented by senior leaders who

have a passion for DE&I. During 2023, the

Council delivered functional and business

segment DE&I strategies, driving greater

accountability within the organisation. The

Council has continued to deliver against its

road map, with initiatives centred around

knowledge and culture, process and

policy, and communications and reporting.

One of the significant developments in our

commitment to DE&I is the introduction

of a Culture of Inclusion Index, measured

through our engagement survey. Our

Culture of Inclusion index currently stands

at a 3.9 mean out of 5.0, an indicator of

the positive impact of our DE&I efforts on

our workplace culture.

Our strategy to increase gender diversity

continues to result in a greater proportion

of females in senior positions, up to 37%

in 2023 (from 35% in 2022). We align with

the FTSE Women Leaders definition of senior

positions: that is, our ELT and direct reports

excluding administrative roles. Across the

whole employee population, gender diversity

increased to 27% (2022: 24%).

% female 2023 2022 2021 2020 2019

Senior leaders

37 35 31 30 25

Total employees 27 24 24 24 23

1 ELT and direct reports, excluding administrative personnel. Numbers do not include Ludwigshafen.

% ethnically diverse (US only) 2023 2022 2021 2020

Total 26 26 22 21

Employee-led initiatives

foster DE&I

In 2023, our Women in Leadership

forum conducted listening lounges

globally coupled with local initiatives.

This plays a crucial role in

understanding the unique challenges

faced by women in the workplace,

allowing us to address these issues

effectively. They also gathered inspiring

career stories from five women leaders

for International Women’s Day and

hosted a global workshop on resilience.

We also saw the establishment of

a new Employee Resource Group – the

Women Engineers of Elementis. This

initiative aims to create a supportive

community for our women engineers,

offering networking opportunities,

resources for professional development,

and a collaborative environment that

empowers women to reach their

full potential.

US ethnic diversity has held steady over

2022 at 26% (against a target of 30%)

and increased 5% since 2020. We

continue to ensure diverse candidate

pools and interviewing panels. We expect

our diverse talent to be reflected within

our Board and leadership teams, and have

started our journey to voluntarily collect

ethnic diversity data globally.

Elementis is an equal opportunities

employer and considers applications

for employment from all backgrounds.

We provide facilities, equipment and

training to assist all employees. Should

an employee become disabled during

their employment, efforts would be made

to retain them in their current role or to

explore opportunities for redeployment

in the Group. In 2023, we completed

the vast majority of the Facility Access

Programme removing physical barriers

in all but one of our sites.

Elementis plc

Annual Report and Accounts 2023

Listening to our colleagues:

engagement survey

Elementis is committed to improving

employee engagement throughout the

business. Our engagement survey enables

our people to provide feedback about what

they need to become happier and more

successful at work. We use the feedback

and external trend analysis to make data

driven decisions that improve employee

engagement and Company performance.

In 2023, we changed providers and started

using Gallup, the leading provider of

insights into employee engagement.

The process is now biannual, with surveys

occurring on a fixed schedule in March

and September, no matter what is

happening in the business. Previously

employees were only surveyed once

per year.

In both surveys of 2023, we had over

80% participation rates. Overall, our

grand mean score in the 12 key areas

(also known as ‘Gallup Q12’) remained

the same in both surveys: 3.86 out of 5.

Our ambition is to be at the 75th percentile

of companies by 2025. Currently, we are

at the 35th percentile and with the

right focus, we are confident we can

achieve this.

The survey results serve as a foundation

for managers to initiate meaningful

discussions with their teams. These

discussions involve recognising and

celebrating successful practices,

as well as adapting strategies to enhance

engagement where necessary. In the

September 2023 survey, 62% of

participants agreed/strongly agreed

with “My team has made progress on

the goals set during our action planning

sessions after the last Employee

Engagement Survey”.

We disseminate survey highlights

globally, fostering a culture of transparency

and shared understanding across

the organisation.

Supporting the wellbeing of

our people

We continue to highlight the importance

of wellbeing and mental health. In 2023,

we extended our employee assistance

programme to all the countries where

we have operations, offering counselling,

legal and financial consultation, and crisis

intervention services to all our employees

and their family at no cost to them.

We are committed to accommodating

flexible work arrangements including

working from home, flexible work

schedules and part-time work, as long

as the role allows, and we promote

meaningful and open conversations about

what works best to balance individual

needs and deliver against goals and

business requirements.

Continuous learning and development

We encourage our people to develop

their expertise and expand their skills,

so we can all confidently create value in

everything we do. We embed learning

and development in our core processes

via Performance Management and Talent

& Succession. With these processes

we have a fair and consistent approach

to assess individual learning and

development needs, provide clear learning

and development targets and create

learning and development opportunities.

Through live (virtual and in-person)

workshops and via our online platform,

we provide training supporting our key

priorities. All employees have unlimited

access to LinkedIn Learning where they

can take e-learnings that suit their personal

learning needs. Over 1,720 hours were

logged on LinkedIn Learning in 2023.

In China we also provide unlimited

access to a local learning platform

called Lzdxedu.com, where 2,747 hours

were logged during 2023.

We recognise the importance of

developing talent internally, as well

as attracting talent from outside the

organisation, to provide our employees

with the skills they need to succeed in

the future.

Managing and supporting

performance

With the performance management

process in Elementis, we align individual

and business goals to drive organisational

success. We stimulate a culture of

performance and develop our employees.

This connects the different HR processes

and ensures a fair and consistent

approach. The performance management

process starts with goal setting, where

employees are asked to set goals that

contribute to the key priorities of Elementis.

We use the mid-year review to review the

goals and actions and adjust if needed.

During the year end review employees and

managers evaluate their performance and

managers are asked to give a performance

rating. The ratings are calibrated to ensure

fairness. The final performance rating is

connected to a salary increase and bonus.

All employees who join before October in

the year participate in the performance

management process.

>80%

employee participation

Mean Gallup

Q12 score

3.86

out of 5

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Sustainability

People

continued

Supporting leaders

through change

To support leaders through these

changes, the ELT undertook change

readiness workshops in London and

in the US. In addition, approximately

60 senior leaders within the business

in the US and Europe undertook

change leadership workshops and

approximately another 70 people

managers attended a virtual change

workshop in December 2023. We will

continue to review support for our

people managers and leaders over

2024 to ensure that they are effectively

leading the organisation through the

changes over the next year.

Fit for the Future

In 2023, Elementis announced a series

of proposed changes to the organisation

and our ways of working that will make

Elementis Fit for the Future. These

changes started in Q3 2023 and will be

completed during 2025. They include a

simpler and more efficient organisational

structure based around our three regions;

the opening of an R&D unit and global

centre of excellence in Porto, Portugal;

and the outsourcing of several financial

processes. As a result of the proposed

changes, around 190 roles will be

impacted globally and the Cologne site,

in Germany, will be closed. Employees

were notified as soon as possible, and

consultation took place with the Dutch

and German works councils and the

Finnish shop stewards, with the

appropriate agreements being finalised

from October 2023 to January 2024

and communicated to employees.

As a way to demonstrate our value of

respect, we are committed to being as

transparent as possible with employees

about the changes. We created an intranet

page with FAQs and other relevant content

in all languages, and we have provided

frequent updates via leadership briefings

and town hall meetings.

Supporting our communities

We offer our employees paid time off to spend volunteering and encourage them

to participate in volunteering activity as teams. A few examples of activities done

in 2023:

The Women in Leadership group at SciPark, New Jersey, US, organised an offsite

volunteering activity at Lawrence Community Centre. A total of 11 employees from

SciPark helped paint and refresh the classroom, game room and bathroom of the

community centre that is used during the summer by young children in need

Employees from our Hsinchu site, in Taiwan, participated in a beach clean-up

organised by the Government of Hsinchu City, and collected litter and debris

from the local beach

Employees from Elementis’ Anji site, in China, visited a school in Anji for

immigrant workers’ children. They provided books and stationery to the children.

The Anji Plant Manager spoke to the children about the importance of studying

to build a bright future

The HR team from our Taloja, India, operation supported a local school with

International Yoga Day celebrations on 21 June, providing free yoga lessons

with an accredited instructor, emphasising the benefits of the practice for health

and wellbeing

Elementis plc

Annual Report and Accounts 2023

Ethics and compliance

We are committed to conducting business

with integrity around the world and to fair

and ethical behaviour throughout

our organisation. Our Code of Conduct

and Ethics (“Code”), entitled ‘Integrity

is our Specialty’, is the cornerstone of

our ethics and compliance programme.

It helps us communicate our commitment

to responsible business and promotes

a culture of complying with the law and

doing business ethically. It provides the

framework for:

Making a culture of ethics and

compliance apparent and accessible

to all employees and third parties doing

business with Elementis

Providing training, information and

guidance on key compliance areas

Guaranteeing that all concerns are

addressed appropriately

Ensuring ethical and compliance

matters are considered and weighted

appropriately in all Elementis’

business decisions

Our Code is available on our intranet

and our website in seven languages.

The Code is also promoted through our

organisation via printed materials as well as

in communications on compliance topics.

Our Integrity is our Specialty logo is used

as a visual reminder of the importance of

ethics and compliance at Elementis.

Our governance structure

The Ethics and Compliance Council

(“ECC”) continued to hold quarterly

meetings throughout 2023. The ECC

comprises the Group General Counsel

& Chief Compliance Officer (Chair),

the Head of Compliance, the executive

leaders from each business segment and

function, and Internal Audit. The ECC

reports to the CEO after each meeting

and to the Board twice a year. Its purpose

is to uphold and oversee an ethics and

compliance culture at Elementis and to

ensure the Code, and related Elementis

policies and standards, are effectively

communicated and implemented.

Risk assessment

Following on from the risk assessments

conducted in 2022, we continue to

monitor our compliance risks. This

includes reviewing internal data from

the compliance programme as well

as external information on new laws,

enforcement proceedings, corruption

risks and benchmark data.

Key topics in 2023

Trade sanctions continued to be a major

area of focus: in particular, compliance

with international sanctions on Russia,

covering products, organisations and

individuals. The Legal & Compliance team

worked closely with colleagues across the

business units to manage compliance and

resolve questions. Adjustments were also

made in our ordering system to improve

control mechanisms in relation to

trade sanctions.

We implemented our new screening

system for customers and suppliers during

2023, and supported the launch with

a new Global Policy on Customer and

Supplier Screening, as well as providing

training and guidance on use of the system

to colleagues. The system is a key part of

our compliance and responsible sourcing

efforts. We also launched our first Business

Partner Code of Conduct, setting out the

expectations we have of our suppliers and

other third parties with whom we work.

The Business Partner Code is available

on our website in English and Chinese

languages. We also ran e-learning training

on trade sanctions and Modern Slavery to

further enhance employee understanding

of those risks and the role of screening in

managing them.

Another major project in 2023 was

designing and implementing a new system

for the management of our Global

Policies to improve controls and increase

efficiency. The new system is explained in

our new Policy on Creation, Approval and

Review of Global Documents, including

a Document Hierarchy and a Standard

Template for Global Policies. A functional

review of documentation was conducted,

to identify and document our current

Global Policies. Following this review,

a new searchable Global Policies library,

available on our intranet, was created,

so that the standards we expect everyone

to follow are easily accessible.

We are committed to ensuring that Integrity is our Specialty by conducting business fairly

and ethically.

Ethics & Compliance week

Our first Ethics & Compliance Week was held in May 2023 to mark a year since the

launch of our new Code of Conduct. Colleagues gathered together at various sites,

including London, Amsterdam, Hsinchu and Livingston, to celebrate that milestone

and learn more about ethics and compliance. The theme of the week was ‘Speak Up,

Listen Up, Follow Up’, and it was publicised throughout our company with branded

posters and digital media.

Global events through the week included:

Training for line managers on creating

psychological safety and trust

Keynote speech by a former FBI agent

entitled ‘Wilful & inattentional blindness:

Why we fail to see what we need to see’

South East Asia compliance case

study session

A webinar on ethical decision making

and sustainability

A virtual townhall, in which our CEO

and members of the ELT focused on the

importance of speaking up and shared

powerful personal experiences across

different compliance areas

Events were well attended, with good engagement levels and very positive feedback.

Sustainability

Responsible business

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Our Speak Up culture

We increased our focus on Speak Up

to ensure that we foster a culture where

everyone feels able to speak up and be

heard. In March 2023, we conducted

a Speak Up survey to gain insights into

whether employees felt comfortable

speaking up, and potential barriers to

speaking up within our organisation.

The results were reviewed by the ELT

and the Board, and discussed during the

Ethics & Compliance Week townhall.

Appropriate actions were taken based

on the findings, including promoting

Speak Up throughout Ethics and

Compliance Week and delivering

bespoke line manager training.

We value open and honest communication,

and encourage employees and third

parties to speak up about any concern

as it arises, to their manager, HR, other

Elementis function (such as HSE or

Finance), or Legal & Compliance. Where

an individual does not feel able to raise the

matter with anyone at Elementis, it can

be raised confidentially and anonymously

(where local law permits) to a reporting

service hosted independently of Elementis,

IntegrityCounts, which is available 24

hours a day, 7 days a week, in multiple

languages. These Speak Up channels

are publicised in various ways including in

our Code, on our intranet, on the training

portal and on posters at sites.

All reports are reviewed and appropriate

action taken, which may include

investigation at the direction of the

Group General Counsel & Chief

Compliance Officer. We ensure that all

necessary steps are taken based on the

outcome of the investigation, following

our internal investigations procedures,

including provision of regular updates

to the reporter. We have a clear stance

on non-retaliation and are committed to

protecting from retaliation any employee

who reports a violation in good faith,

even if the report is not substantiated

in an investigation.

We received a total of 17 reports (three in

2022). Of these, six reports were received

via the independent reporting service

(2022: one) and 11 via other routes

such as direct contact with Compliance

(2022: two). This increase brings our

Speak Up rate closer to the benchmark

level for a company of our size, reflecting

the work we have done on improving our

Speak Up culture. No issues which were

material in the context of the Group

were reported to the helpline or via

other means during the year.

Our training programme

We delivered an updated programme of

e-learning, tailored to the risks to which

Elementis and its employees were exposed

over the year. There were over 2,700 hours

of compliance training completed on the

portal in 2023. This was supplemented

by bespoke in-person training to targeted

groups to address specific compliance

risks arising during the year.

Data privacy

We remain committed to ensuring the

security and confidentiality of our data.

The Data Protection Steering Committee

continues to meet regularly, overseeing

the Group’s compliance with the

ever-changing landscape of privacy

and data protection regulation.

In 2023, as cyber attacks continued to

surge across the globe, we launched

a revised Incident Response Plan which

provides a structured and systematic

incident response process for all

information security incidents. We remain

committed to the security of our network

and systems and continue to run regular

simulated phishing campaigns to raise

employee awareness of cyber security

threats. The overall simulated compromise

rate remained considerably below the

average predicted rate. To address

incident reports, we introduced technical

controls to help prevent emails being

sent in error and launched advanced

anti-phishing technologies which help

guide our users and raise security

awareness through coaching-in-context.

We continue to encourage the timely, open

and transparent reporting of actual and

potential incidents concerning personal

data, and have dealt with the following

reports during 2023:

Product stewardship

We are committed to a safer future,

minimising product and chemical-related

hazards to people or the environment by

design where possible, and throughout

product manufacture, use and disposal.

We are active members of the Scientific

Association of European Talc Producers

and the European Bentonite Association,

which are both sections of the Industrial

Minerals Association Europe.

Our global Product Stewardship

organisation monitors local and regional

regulations for impacts to our products

and supply chain and ensures our

products are compliant with current

regulations. A member of the ELT oversees

the group and provides the consistency

and strategy needed to ensure harmonised

approaches to global customers while

ensuring local regulatory compliance.

Our Product Stewardship team is actively

involved with our R&D and Supply Chain

organisation. When a new product is

conceptualised, Product Stewardship

is engaged from the beginning to

ensure the materials, processes,

and sales are compliant with appropriate

regulations. If they are not, we manage the

authorisation process so that the product

can be safely sold and used as intended.

We track Substances of Very High

Concern (“SVHC”), taking proactive action

to eliminate these substances whenever it

is technically feasible and when required

by customers. SVHC and other chemicals

of concern are brought to the attention of

the Product Development teams so they

can either avoid them or manage them

to expectations.

Replacing phthalates

in clear sealants

Phthalates are a class of chemicals

under increasing scrutiny by regulators,

with many being listed in Europe as

SVHC and under Annex XIV for

‘restrictions’. They may become

restricted for certain uses in various

US states.

Our innovative rheology additive

with high natural content (>75%)

allows formulators to replace phthalate-

based plasticisers in clear sealants,

such as those used in home kitchens

and bathrooms, eliminating these

hazardous materials while simplifying

the formulation with a more

sustainable alternative.

Cause of report

Disclosed

in error

Reports

Loss or theft of

data/device

Reports

Cyber

Reports

Technical/

procedural failure

Reports

Third

party

Reports

Other

Reports

Sustainability

Responsible Business

continued

Elementis plc

Annual Report and Accounts 2023

We use a software system to ensure that

our safety data sheets (“SDS”) and

product labelling comply with current

regulations in the region where the product

is sold. Commercial SDS for our products

are available on our website in English and

in local languages.

Lowering the use

of biocides

We have launched new dry powder

non-ionic associative thickeners as an

alternative to our water-based version.

These powders avoid the use of toxic

biocides in the product, which are

necessary to prevent microbial growth

in the water-based versions. In addition,

the technical performance of the dry

powder product is also improved, and

its much lower weight means shipping

emissions are reduced.

Responsible sourcing

We operate a complex, international supply

chain of over 500 suppliers for our direct

materials, and thousands more for indirect

procurement. Supported by our new

Business Partner Code of Conduct and

enhanced supplier screening system

(page 51), we are committed to improving

supply chain transparency, improving how

we assess and manage sustainability risks

in the supply chain, and partnering with

suppliers who share our commitments. We

conducted site visits to 12 key suppliers in

2023 to better understand their operating

environment and potential risk areas. One

of these suppliers is in a high risk location,

and we checked specifically for indications

of child or forced labour, and reviewed

their human rights policies for alignment

with our requirements. No concerns were

noted during the visit.

We continue to develop ways to

systematically integrate supplier

sustainability risk analysis into our business

systems. One tool we are assessing is

the EcoVadis platform. For example, we

analysed our 2022 direct material supplier

base and found that 25% of our spend was

with 28 suppliers who had an EcoVadis

Gold rating or higher, indicating they have

a higher level of sustainability maturity

and a lower level of sustainability risk.

We support the use of certified sustainable

palm oil and derivatives. Our Livingston,

UK, site purchases palm oil derivatives

for use in certain products. The site is

third party certified to the Roundtable on

Sustainable Palm Oil Mass Balance Supply

Chain Model. In 2023, we engaged directly

with our key palm oil derivative suppliers

to better understand their processes for

managing slavery and labour risks further

upstream in the palm-derivative supply

chain, receiving satisfactory responses.

We purchase a small quantity of

tin-containing chemicals in the UK

and China. Using the conflict minerals

reporting template from the Responsible

Minerals Initiative, we confirmed there was

no conflict mineral risk associated with

these purchases.

Tax transparency

On an annual basis, we develop and

publish our tax strategy. This statement

is approved by the Board and is available

on the Company’s website. We aim for

proactive and transparent relationships

with relevant tax authorities to facilitate

meeting our statutory and legislative

obligations. For further details,

see page 89.

Elementis seeks to avoid animal testing

whenever possible. If we are required by

regulation to do so (for example, under

European Union (“EU”) Registration,

Evaluation, Authorisation and restriction

of Chemicals (“REACH”) requirements),

we engage third parties to conduct the

tests in the least impactful way possible.

Our Animal Testing Policy is available on

our website.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Non-financial information statement

Reporting requirement

Policies and standards that

govern our approach

Where to read more in this Report about our

impact, including the principal risks relating

to these matters Page

Anti-corruption

and anti-bribery

― Code of Conduct

― Business Partner Code of Conduct

― Anti-corruption Policy

― Anti-trust Policy (global competition)

― Responsible business

― www.elementis.com

51-53

Employees ― Code of Conduct

― Business Partner Code of Conduct

― Health, Safety and Environmental Policy

― Life saving rules

― Data protection and privacy policies

― Equality and diversity policies

― Whistleblowing policies

― People

― Data privacy

― Responsible business

― Workforce engagement

― Diversity Policy and objectives

― Whistleblowing

― Directors’ Remuneration report

45-50

51-53

80-81

86-87

96-122

Environmental matters ― Code of Conduct

― Business Partner Code of Conduct

― Health, Safety and Environmental Policy

― Net Zero transition plan

― Water Stewardship Statement and Policy

― Biodiversity Statement

― Sustainability

― Materiality and strategy

― Climate

― Environment

― People

― Responsible business

― www.elementis.com

29-32

34-41

42-44

45-50

51-53

Respect for human rights ― Code of Conduct

― Business Partner Code of Conduct

― Equality and diversity policies

― Data protection and privacy policies

― Purchasing Code of Practice

― Modern Slavery Statement

― People

― Data privacy

― Diversity Policy and objectives

45-50

86-87

Social matters ― Code of Conduct

― Volunteering Policy

― While we do not have a specific policy on

social/community matters, we engage directly

with our communities wherever we operate

― Stakeholder engagement

― Environment

― People

26-27

42-44

45-50

Stakeholders ― Section 172 ― Section 172 05, 28

Description of the

business model

― Business model 07-09

Description of principal

risks and impact on

business activity

― Climate

― Risk management

― Principal risks and uncertainties

― Audit Committee report

63-66

67-71

88-91

Innovation ― Strategic progress

― Innovation

18-19

Non-financial KPIs ― Non-financial KPIs

― Sustainability

― Materiality and strategy

― Climate

― Environment

24-25

29-32

34-41

42-44

1 The Company’s policies, statement and codes are available on the Company’s website, www.elementis.com

Further information

Reference to our policies, due diligence processes and information on how we are performing in these areas is contained

throughout the Strategic report. Information on key performance indicators used to assess progress against targets used to

manage climate-related risks and opportunities can be found on page 39. Certain Group policies and internal standards and

guidelines are not published externally.

Sections 414CA and 414CB of the Companies Act 2006 require the Company to

provide information to help stakeholders understand our position on non-financial matters.

The table below sets out where you can find this information.

Elementis plc

Annual Report and Accounts 2023

Ralph Hewins

Chief Financial Officer

Finance

report

Significant

leverage reduction

and further

improvement in

performance.

$m 2023

Effect of

exchange

rates

Decrease

2023 2022

Coatings 367.6 (1.5) (20.0) 389.1

Talc 136.5 3.1 (2.4) 135.8

Performance Specialties 504.1 1.6 (22.4) 524.9

Personal Care 209.3 1.3 (3.5) 211.5

Revenue 713.4 2.9 (25.9) 736.4

2023 2022

Operating

profit/(loss)

Adjusting

items

Adjusted

operating

profit/(loss)

Operating

profit/(loss)

Adjusting

items

Adjusted

operating

profit/(loss)

Coatings 55.2 0.9 56 .1 66.2 4.1 70.3

Talc 8.6 5.4 14.0 (134.0) 133.6 (0.4)

Performance Specialties 63.8 6.3 70.1 (67.8) 137.7 69.9

Personal Care 43.2 7.1 50.3 40.6 8.4 49.0

Central costs (48.1) 31.6 (16.5) (14.6) (3.8) (18.4)

Operating profit/(loss) 58.9 45.0 103.9 (41.8) 142.3 100.5

1 After adjusting items, see Note 5 for further detail.

Group results

In 2023 revenue decreased 3% on a

reported basis to $713m (2022: $736m)

with improved pricing and mix offset by

lower volumes across all businesses.

On a constant currency basis, revenue

decreased 4%. Reported operating profit

increased to $59m (2022: loss of $42m)

as a result of a reduction in one-off items

during 2023.

Adjusted operating profit increased 2% on

a constant currency basis, 3% on reported

basis, to $104m (2022: $101m), with cost

savings and improved price/mix more than

offsetting the impact of lower revenues.

Profit from continuing operations for the

year was $28m (2022: loss of $63m).

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Finance Report

continued

Adjusting items

In addition to the statutory results the Group uses alternative

performance measures, to provide additional analysis of the

performance of the business. The Board considers these

non-GAAP measures as an alternative way to measure the

Group’s performance. Adjusting items in 2023 resulted in a charge

of $44.7m before tax (2022: $135.7m). The key categories of

adjusting items are summarised below. For more information on

adjusting items and the Group’s policy for adjusting items, please

see Note 5 and Note 1 to the financial statements respectively.

Business transformation

In November 2020, the closure of the Charleston plant was

announced. Costs of $0.7m (2022: $2.9m) associated with

the closure of the site are classified as an adjusting item and the

site is planned to be disposed of in the future. Since November

2020, $23.4m has been incurred in relation to the closure of

the site. In September 2023, the Fit for the Future organisation

restructuring programme was announced, for which a

restructuring provision of $25.4m was recognised in 2023, in line

with the requirements of IAS 37. Total overall estimated costs

for the programme are $31.3m, of which $5.4m was utilised in

2023. The programme is expected to be completed in 2025.

Environmental provisions

The Group’s environmental provision is calculated on a discounted

cash flow basis, reflecting the time period over which spending is

estimated to take place. The movement in the provision relates to

changes in discount rates which has resulted in the reduction of

$0.4m to the liability (2022: $7.2m), and extra remediation work

identified in the year which has resulted in a $6.6m increase to the

liability (2022: $3.4m). As these costs relate to non-operational

facilities they are classified as adjusting items.

Amortisation of intangibles arising on acquisitions

Amortisation of $12.7m (2022: $14.9m) represents the charge

in respect of the Group’s acquired intangible assets. As in

previous years, these are included in adjusting items as they are

a non-cash charge arising from historical investment activities.

Unrealised mark to market of derivatives

The unrealised movements in the mark to market valuation of

financial instruments that are not in hedging relationships are

treated as adjusting items as they are unrealised non-cash fair

value adjustments that will not affect the cash flows of the Group.

Interest on EU state aid receivable

Finance income of $1.4m has been recognised in respect of

interest due to the Group if the EU state aid case settles in

favour of the Group. Refer to Note 30 for further details on

the tax recoverable asset.

Hedging

The Group uses cash flow hedges to manage exposure to interest

rate and commodity price risks, particularly those associated with

US dollar and euro interest payments and aluminium and nickel

pricing. In 2023 interest rate and commodity price movements

resulted in a net gain from the hedge transactions of $6.3m

(2022: loss of $1.6m) recycled to the income statement.

Central costs

Central costs are those costs that are not identifiable as expenses

of a particular business segment and comprise expenditures of

the Board of Directors and corporate head office. Adjusted central

costs reduced to $16.5m (2022: $18.4m), reflecting continued

focus on cost discipline.

Other expenses

Other expenses are administration costs incurred and paid by

the Group’s pension schemes that relate primarily to former

employees of legacy businesses. These costs were $2.3m

in 2023 (2022: $1.3m).

Credit/(charge)

$m Coatings Talc

Performance

Specialties

Personal

Care Central costs Total

Business transformation (0.7) – (0.7) – (25.4) (26.1)

Environmental provisions – – – – (6.2) (6.2)

Amortisation of intangibles arising on acquisitions (0.2) (5.4) (5.6) (7.1) – (12.7)

Total charge to operating profit (0.9) (5.4) (6.3) (7.1) (31.6) (45.0)

Unrealised mark to market of derivatives – – – – (1.1) (1.1)

Interest on EU state aid receivables – – – – 1.4 1.4

Total (0.9) (5.4) (6.3) (7.1) (31.3) (44.7)

Adjusted operating profit

Operating

profit

2023

Effect of

exchange

rates

Increase/

(Decrease)

2023

Operating

profit

2022

Coatings 56 .1 0.3 (14.5) 70.3

Talc 14.0 (0.3) 14.7 (0.4)

Performance Specialties 70.1 – 0.2 69.9

Personal Care 50.3 1.2 0.1 49.0

Central costs (16.5) – 1.9 (18.4)

Adjusted operating profit 103.9 1.2 2.2 100.5

1 After adjusting items, see Note 5 for further detail.

Elementis plc

Annual Report and Accounts 2023

Net finance cost

$m 2023 2022

Finance income 0.5 0.2

Finance cost of borrowings (17.5) (19.5)

(17.0) (19.3)

Net pension finance income 1.0 0.6

Discount unwind on provisions (1.4) (0.7)

Fair value movement on derivatives 0.4 9.1

Interest on EU state aid receivable 1.4 –

Interest on lease liabilities (1.3) (1.4)

Net finance costs (16.9) (11.7)

Net finance costs increased to $16.9m (2022: $11.7m). Net

finance costs comprise interest payable on borrowings, calculated

using the effective interest rate method, facility arrangement

fees, the unwinding of discounts on the Group’s environmental

provisions, net pension interest income/expense, fair value

movement on derivatives, interest receivable on the EU state

aid receivable balance and interest charged on lease liabilities.

The increase in net finance costs is primarily due a lower fair

value movement on derivatives of $0.5m (2022: $9.1m). Reduction

in the fair value movement on derivatives, which are unrealised

mark to market movements on derivatives that are not in hedging

relationships, was driven by the contractual maturity of these

derivative contracts in 2023. These benefits are not expected

to recur in the next financial year.

Finance cost of borrowings have decreased by $2.0m,

primarily due to a lower net debt level during 2023.

Net pension finance income of $1.0m (2022: $0.6m) is

a function of discount rates under IAS 19, and the value of

the schemes’ deficit or surplus positions.

The Group’s environmental provisions are calculated on a

discounted basis, reflecting the time period over which the

spending is estimated to take place. The discount unwind on

provisions of $1.4m in 2023 was greater than prior year due

to higher discount rates.

Interest receivable of $1.4m has been recognised in respect

of interest due to the Group if the EU state aid case settles in

favour of the Group. Refer to Note 30 for further details on the

tax recoverable asset.

Both finance income and the interest on lease liabilities were

broadly consistent with the prior year.

Taxation

2023 2022

Effective

rate

% $m

Effective

rate

Reported tax charge/(credit) 11.5 29.0 7. 8 (14.2)

Adjusting items tax credit (8.4) – (8.3) –

Adjusted tax charge 19.9 23.5 16.1 20.0

The Group incurred a tax charge of $19.9m (2022: $16.1m)

on adjusted profit before tax, resulting in an effective tax rate

of 23.6% (2022: 20.0%). The increase in effective tax rate was

largely due to an increase in the UK corporation tax rate to 25%

from April 2023.

Tax on adjusting items relates primarily to the amortisation of

intangible assets and the Fit for the Future restructuring programme.

The medium-term expectation for the Group’s adjusted effective

tax rate is around 26%.

Earnings per share

To aid comparability of the underlying performance of the Group,

earnings per share (“EPS”) reported under IFRS is adjusted for

items classified as adjusting.

2023 2022

Profit after tax ($m) 28.2 (62.6)

Adjusting items net of tax ($m) 36.3 127. 4

Adjusted profit after tax ($m) 64.5 64.8

Weighted average number of shares

for the purposes of basic EPS (m) 585.7 582.6

Effect of dilutive shares options (m) 11.2 9.7

Weighted average number of shares

for the purposes of diluted EPS (m) 596.9 592.3

Basic EPS before adjusting

items (cents) 4.8 (10.7)

Diluted EPS before adjusting

items (cents) 4.7 (10.7)

Adjusted basic EPS (cents) 11.0 11.1

Adjusted diluted EPS (cents) 10.8 10.9

Adjusted diluted EPS decreased by 1% to 10.8 cents (2022:

10.9 cents), primarily due to a lower adjusted profit after tax.

Basic EPS before adjusting items increased to 4.8 cents (2022:

negative 10.7 cents), principally due to a higher profit after tax.

Note 9 provides disclosure of EPS calculations both including

and excluding the effects of adjusting items and the potential

dilutive effects of outstanding and exercisable options.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Distributions to shareholders

The Board has considered the strength of the balance sheet

and the near-term prospects for the business and recommended

the reinstatement of the ordinary dividend to an amount of

2.1 cents per share, which will be paid in pounds sterling.

Dividend of 1.65 pence per share has been determined by

converting the 2.1 cents into pound sterling using the forward rate

of £1.00:$1.2705, as determined on 4 March 2024. If approved at

the AGM, the dividend will be paid on 31 May 2024 to

shareholders included on the share register on 3 May 2024.

Cash flow

As per the statutory cash flow statement, net cash inflow from

operating activities of $76.8m (2022: $77.0m), was in line with the

prior year. A net working capital inflow of $2.1m (2022: outflow of

$37.2m) related to movements in inventories, debtors and creditors,

offset by higher interest and tax payments, and net cash outflow

from discontinued operations of $12.5m (2022: inflow of $5.6m).

Net cash inflow in relation to investing activities increased to

$101.1m (2022: negative $46.9m) primarily due to the gross cash

proceeds from the sale of the Chromium business of $139.2m.

Net cash outflow in relation to financing activities increased to

$168.0m (2022: $57.8m) primarily due to the repayment of

borrowings following the sale of the Chromium business.

The adjusted cash flow, which excludes the effect of adjusting

items from operating cash flow and is therefore distinct from the

statutory cash flow referenced above, is summarised below.

A reconciliation between statutory operating profit to EBITDA

is shown in the alternative performance measures (“APM”)

section on page 190.

Adjusted cash flow

$m 2023 2022

EBITDA

145.8 141.8

Change in working capital 2.1 (43.3)

Capital expenditure (38.2) (33.1)

Other (4.4) 0.3

Adjusted operating cash flow 105.3 65.7

Pension payments (3.3) (0.7)

Interest (17.8) (14.4)

Tax (27. 3) (13.3)

Adjusting items (5.6) (5.2)

Payment of lease liabilities (6.3) (7.1)

Free cash flow 45.0 25.0

Issue of shares, net of share

repurchases by ESOT (1.0) 0.9

Dividends paid – –

Acquisitions and disposals 139.2 –

Discontinued operations (12.5) (2.1)

Currency fluctuations (5.9) 10.4

Movement in net debt 164.8 34.2

Net debt at start of year (366.8) (401.0)

Net debt at end of year (202.0) (366.8)

1 Earnings before interest, tax, adjusting items, depreciation, and amortisation.

Adjusted operating cash flow increased to $105.3m

(2022: $65.7m), primarily driven by a $2.1m working capital

inflow compared to an outflow of $43.3m in the prior year.

Free cash flow increased to $45.0m (2022: $25.0m), primarily

driven by improved operating cashflow, partly offset by higher

tax payments as a result of higher corporation tax rates in the

countries in which the Group operates, an increase in net interest

paid and an increase in pension payments.

Net debt decreased to $202.0m (2022: $366.8m), a reduction of

$164.8m. Net debt to adjusted EBITDA decreased to 1.4x in 2023

on a pre-IFRS 16 basis (2022: 2.2x). The decrease in leverage

was largely driven by lower net debt as well as the improvement

in adjusted EBITDA, reflective of the Group’s higher earnings.

Balance sheet

$m 2023 2022

Intangible fixed assets 650.6 660.2

Tangible fixed assets 423.6 386.4

Working capital 147.2 141.5

Net tax liabilities (101.5) (102.2)

Provisions and retirement

benefit obligations (48.8) (12.2)

Financial assets and liabilities 11.3 5.9

Lease liabilities (36.2) (36.3)

Unamortised syndicate fees 3.1 4.3

Net debt (202.0) (366.8)

Net assets held for sale – 103.1

Total equity 847.3 783.9

Group equity increased to $847.3m (2022: $783.9m), principally

driven by lower net debt. Intangible fixed assets decreased by

$9.6m due to $13.3m of amortisation, offset by $4.1m of foreign

exchange gain. Increase in tangible fixed assets was driven by

gross additions of $66.6m, right-of-use asset capitalisation of

$5.1m and exchange gains of $24.0m, offset by depreciation

of $41.6m.

Working capital, which comprises inventories, trade and other

receivables and trade and other payables, increased to $147.2m

(2022: $141.5m). The increase was driven by lower payables and

higher receivables, partially offset by lower inventories at the end

of the year.

Net tax liabilities decreased to $101.5m (2022: $102.2m) primarily

as a result of the amortisation of the intangible fixed assets

leading to a reduction in the associated deferred tax liability.

Adjusted ROCE (excluding goodwill) increased to 15%

(2022: 14%), with higher adjusted operating profit partially

offsetting increased total operating capital employed

(see the APM section on page 190 for detail).

Finance Report

continued

Elementis plc

Annual Report and Accounts 2023

Foreign currency

The financial information is prepared and presented in US dollars,

the Group’s reporting currency. The main dollar exchange rates

relevant to the Group are set out below.

2023 2022

Year end Average Year end Average

Pounds sterling 0.78 0.81 0.83 0.81

Euro 0.91 0.93 0.94 0.95

Provisions

The Group records a provision in the balance sheet when it has

a present obligation as a result of past events, which is expected

to result in an outflow of economic benefits in order to settle the

obligation and the amount can be reliably estimated. The Group

calculates provisions on a discounted basis. At the end of 2023,

the Group held provisions of $81.9m (2022: $29.7m) consisting

of environmental provisions of $60.5m (2022: $27.5m), self-

insurance provisions of $0.5m (2022: $0.5m), restructuring

provisions of $20.1m (2022: $0.6m) and other provisions of

$0.8m (2022: $1.1m).

The increase in environmental provisions was largely driven by

additional rehabilitation and closure costs of $28.4m in relation to

the Group’s Finnish talc mines, arising from increased rehabilitation

standards imposed by the Finnish regulators. These costs will be

incurred over the expected life of our talc mines and are not

expected to have a material cash impact in the near term.

The remaining increase related to an expense of $6.6m relating

to extra remediation work required primarily at the Eaglescliffe site,

which was partially offset by a $0.4m credit relating to a change

in the discount rate applied to the liabilities. The remaining

movement in the environmental provisions relates to the unwind

of the discount in the year of $1.5m, offset by currency translation

of $1.3m and utilisation of $4.4m.

The self-insurance provision represents the Group’s estimate of its

liability arising from retained liabilities under the Group’s insurance

programme and remained flat during the period.

The restructuring provision reflects the adjustment to head count

and other costs of restructuring where a need to do so has been

identified by management. The restructuring provision increased

by $25.4m as a result of the Fit for the Future restructuring

programme, of which $5.4m was utilised in 2023.

Pensions and other post retirement

benefits

$m 2023 2022

Net (surplus)/liability:

UK (38.7) (26.4)

US – 3.5

Other 5.6 5.4

(33.1) (17.5)

UK plan

The largest of the Group’s retirement plans is the UK defined

benefit pension scheme (“UK Scheme”), which at the end of 2023

had a surplus, under IAS 19, of $38.7m (2022: $26.4m). The UK

Scheme is relatively mature, with approximately two thirds of its

gross liabilities represented by pensions in payment, and is closed

to new members. The increase in net surplus was largely driven

by returns on plan assets of $9.7m (2022: loss of $200.4m) which

was offset by liability adjustments, primarily due to lower discount

rates, of $0.3m (2022: $3.0m). Company contributions of $1.8m

(2022: $0.5m) reflect the funding agreement reached with the UK

trustees following the 2020 triennial valuation, which concluded in

2021. The 2023 triennial valuation will be concluded in 2024.

US plan

In the US, the Group reports two post retirement plans under IAS

19: a defined benefit pension plan with a net surplus at the end of

2023 of $3.4m (2022: $nil), and a post retirement medical plan

with a liability of $3.4m (2022: $3.5m). The US pension plans are

smaller than the UK plan and in 2023 the overall deficit on the

US plans decreased by $3.5m, as a result of the return on plan

assets of $4.3m (2022: loss of $26.1m) and employer

contributions of $1.4m being offset by actuarial increases

in the liability of $1.3m (2022: $28.7m).

Other plans

Other pension plans amounted to $5.6m (2022: $5.4m) and

relate to pension arrangements for a relatively small number of

employees in Germany, certain UK legacy benefits and one pension

scheme acquired as part of the SummitReheis transaction in 2017.

Financial assets and liabilities

Net financial assets are represented by net derivative financial

assets of $11.3m (2022: $5.9m) which relate to the valuation of

various risk management instruments.

The movements in the mark to market valuation of cross-currency

swaps that are not in hedging relationships are treated as adjusting

items, as they are unrealised non-cash fair value adjustments and

will not affect the cash flows of the Group. The cross-currency

swaps matured in 2023.

Events after the balance sheet date

On 6 March 2024, Elementis entered into an agreement to sell

its former Chromium manufacturing site at Eaglescliffe to Flacks

Group for negative purchase consideration of £11.5m ($14.5m).

Completion of the transaction is conditional on regulatory approval.

There were no other significant events after the balance sheet date.

Ralph Hewins

Chief Financial Officer

6 March 2024

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Financial performance

Personal Care revenue reduced 2%

(or 1% excluding currency impact) to

$209.3 million (2022: $211.5 million),

reflecting continued strong growth in

cosmetics, offset by weaker revenues

in antiperspirant actives.

Volumes remained below the strong prior

year, reflecting the prolonged destocking

of our customers. Lower volumes were

partly offset by $15 million of new business,

improved pricing and higher value product

mix, especially in Cosmetics. In Cosmetics,

sales increased in all regions, with

a particularly strong growth in Asia.

Adjusted operating profit was 3% higher

at $50.3 million (2022: $49.0 million),

or flat on an underlying basis. The adjusted

operating margin improved to 24.1%

(2022: 23.2%).

Strategy

Personal Care operates in attractive

growth markets globally. It develops

and delivers high-value additives to its

customers, based on unique chemistry

and formulation expertise. Our medium

term growth strategy is focused on three

core market segments, in which we built

a strong competitive position: Colour

Cosmetics, Skin Care and Antiperspirants.

We have seen good growth in Colour

Cosmetics, especially in Asia, where

we significantly enhanced our sales and

marketing capabilities, in recent years. This

provides better access and penetration

into new and existing Asian regions, either

direct or via a specialised distributor.

We expect further growth in Colour

Cosmetics sales in the coming years,

supported by our innovative products,

such as Bentone

Luxe XO and Bentone

Plus Glow. Those combine our white

hectorite clay with either emulsifiers or

actives, allowing our customers to make,

for example, skincare claims for make-up

products. We have a strong new products

pipeline for 2024, which includes a range

of patent pending Bentone

Ultimate

products, with a higher load of hectorite

clay and a new activation mechanism.

We also plan to launch a natural film former

that will enhance the wear resistance of

colour cosmetics, for example in lipsticks.

These innovative products will further

strengthen our leading position in colour

cosmetics and support further growth.

We target a delivery of $10 million of

above market revenue growth by 2026,

in this application.

Skin Care is an attractive part of the

personal care market, where we have

historically had limited participation. The

natural rheology and film formers market

segment has been growing at around

4-5% annually, supported by increasing

demand from consumers looking for

more sustainable products with natural

ingredients. Our hectorite-based additives

are well positioned to benefit from this

trend, as they work equally effectively in

both water-based and oil-based products.

Since 2019 we generated $10 million

of incremental sales for this application,

and have more than doubled our NBO

pipeline. We now have strong foundation

on which we will build.

Going forward we will continue our

innovation efforts on natural rheology

with more sophisticated products, and

in addition, we will create products that

offer attractive new functionalities.

As an example, in 2024, we plan to

launch water-resistant film formers for

sun care, as well as ingredients supporting

ultra-light and highly liquid skin care

products, which are highly desirable by

Asian consumers. We are also developing

skincare ingredients that leverage the

unique chemical properties of hectorite

as a natural active.

Our ambition is to deliver growth at two

to three times the market by 2026.

Finally, the third area of focus,

Antiperspirants, where we have a global

leading position in antiperspirant actives.

Sales in 2023 were below the strong prior

year, due to softer market demand and

destocking, especially in the second half

of the year.

Looking ahead, our leading position in this

market positions us well for future growth,

further supported by favourable industry

trends. We see trends for longer lasting

sweat protection, and increasingly,

growing demand for more natural

products, including natural actives.

Operating review

Stijn Dejonckheere

SVP Global Personal Care

Revenue

$209.3m

Adjusted operating profit

$50.3m

Revenue by region %

Asia 15%

Europe 37%

Americas 48%

Personal Care

Elementis plc

Annual Report and Accounts 2023

Coatings

Revenue

$367.6m

Adjusted operating profit

$56.1m

Financial performance

Overall revenue decreased 6% on

a reported basis, down 5% excluding

currency impact, to $367.6million

(2022: $389.1 million).

Performance in the year reflected

a combination of customer destocking

and weaker demand environment. In Asia,

where over 80% of our sales come from

industrial activity, we saw underlying

revenue marginally up, with modest growth

across a number of countries including

China, helped by the easing of COVID-19

restrictions in the second half of the year.

The premium decorative sector in

the Americas was affected by weaker

housing market and customer destocking.

European revenues were also lower,

reflecting the continued weak macro-

economic environment, and inflationary

pressures impacting customer demand

in both the decorative and industrial

coatings sectors.

Coatings also includes our specialised

Energy business, which accounts for

just over 10% of total Coatings sales.

Adjusted operating profit decreased

20% on both the reported and underlying

basis, to $56.1 million (2022: $70.3 million),

reflecting lower volumes, offsetting price

and mix benefits.

Adjusted operating margin of 15.3%

(2022: 18.1%) demonstrates resilience

in the challenging market conditions.

Performance Specialties

Luc van Ravenstein

SVP Global Performance Specialties

Revenue

$504.1m

Adjusted operating profit

$70.1m

Revenue by region %

Asia 23%

Europe 43%

Americas 34%

As recognised innovation leaders

in this field, we are focusing on new

products, that address these demands.

For example, our new range of

antiperspirants utilising waste aluminium

will reduce emissions for Elementis,

as well as our customers. In addition,

we have an ambition to develop actives

that bring antiperspirant benefits for

the deodorant product category.

Our production plant in Taloja, India is now

fully operational. Throughout 2023 we

continued to test and qualify products with

our major customers. We expect this to

strengthen our competitive position in

AP Actives through lower production

and distribution costs. Furthermore, it

enhances our supply resilience, allowing

us to deliver products to customers from

multiple sources.

We believe, that our ambitious plans in

the area of AP Actives, will help us deliver

mid-single digit revenue and margin

growth over the next three years.

Colour cosmetics, Skin care and AP

Actives all represent material growth

opportunities with a $70 million NBO

pipeline. We remain focused on helping our

clients with their formulation challenges

and building strong partnerships with

global key accounts.

Innovation remains a key driver of growth

in Personal Care. We have introduced

25 new products since 2020, many of

which are gaining good momentum with

our customers and driving revenue growth.

Sales from new and innovation products

increased to 11% in 2023 (2022: 9%).

Those products offer sustainability benefits

to our customers, either because of a

higher efficacy or because they are

replacing a product of synthetic origin.

As a result, we increased revenues from

natural or naturally-derived products,

which in 2023 represented more than

80% of our total Personal Care sales.

We continue to invest in our capabilities,

having recently announced the opening

of new R&D facility in Porto, Portugal,

which will support further growth and

strengthen our customer proposition.

Performance Specialties was created at

the beginning of 2023, by combining the

Talc and Coatings businesses.

As the two businesses share many

distribution channels and end markets,

the combined segment will enable a

stronger end market focus on attractive

growth opportunities, under a single

leadership team.

We will continue to report Coatings’

and Talc’s performance separately,

for transparency.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Strategy

At our November CMD, we unveiled

our ambitious new targets for the Group,

supported by efficiency and growth

initiatives. To drive growth and enhance

our margins in Coatings, we will focus on

three differentiated, technology-led growth

platforms. These are all positioned to

respond to specific market needs or

to meet major market trends.

The first of these, architectural coatings,

is an important market for Elementis,

with the premium decorative segments

estimated at approximately $1 billion

and growing 4% per annum. We have

developed a suite of innovative, high-

performance products, including rheology

solutions for one-coat hide paint and

powdered associative thickener which

gained significant traction with major

customers in the US and Europe.

Encouraged by this success and seeing

increasing demand from Chinese paint

manufacturers for high-quality and more

sustainable paints, we started producing

architectural additives in our Shanghai site,

aimed at the local market. We believe this,

alongside our manufacturing footprint

across three key regions, will support our

ambition to grow at twice the market by

2026, in this attractive market segment.

The second growth platform is industrial

coatings, where we see growing demand

for more sustainable coatings and coating

additives, driven by regulations and market

trends. We focus on an addressable

market of around $800 million, which

includes additives for high-performance

segments such as marine, protective

and automotive industries, growing at

c.4% annually.

Across this market segment, we expect

to deliver $30 million of above market

revenues by 2026, focusing on ingredients

that make customers’ formulations

more sustainable, without sacrificing

performance. Those include bio-based

organic thixotropes and defoamers,

and additives for water-based systems.

In addition, we see powder coatings

gaining traction as a more sustainable

option compared to traditional solvent-

or water-based solutions. Powder coatings

do not require solvents and the latest

technology developments are enabling

lower curing temperatures. This makes

them suitable for heat sensitive materials

such as wood coatings, creating additional

growth opportunities.

Our third growth platform comprises

adhesives, sealants and construction

additives, where we offer high-

performance additives for a range of

applications, for example, pressure

sensitive adhesives, water-based

construction sealants or cement-based

tile mortars. This is a relatively new

application for Elementis, with the target

market valued at around $700 million,

growing at 5% per year.

Growth in this market segment is driven

by trends such as light weighting and

more efficient manufacturing processes.

Our ambition is to double our market

share from 3% to 6% by 2026 by focusing

on innovative products, such as, our

low activation temperature Thixatrol

technology. Today it is mainly used as

an adhesives additive. This innovative

technology can reduce energy processing

costs when compared with other

amide-based technologies, also leading

to lower overall emissions. In addition,

when compared with fumed silica,

it offers improved process efficiency

and safety benefits (through reduced

exposure to inhalation).

A major component of our growth

strategy is our key account management

programme. We have built strong technical

and commercial relationships with

major customers and cooperate in the

development of new formulations to

enhance their products and processes.

This drives volume and revenue growth

and deepens our relationships with major

customers. In 2023, we worked on 19 joint

development projects with our customers,

generating material revenues and

contributing to improved product mix.

This approach, combined with our

innovation focus, is helping us explore

new market segments and create new

growth opportunities.

Talc

Revenue

$136.5m

Adjusted operating profit

$14.0m

Financial performance

Talc revenue remained broadly flat at

$136.5 million (2022: $135.8 million)

or 2% down, excluding currency impact.

Pricing actions and a better product mix

successfully offset lower volumes, due to

weaker demands in many end markets.

The automotive sector remains our main

market for talc, and sales into this market

were below the prior year, impacted by

destocking in the auto plastic segment.

Despite the flat revenues, we saw material

improvement in Talc profitability, with

adjusted operating profit growing to

$14.0 million (2022: loss $0.4 million).

Profit growth was driven by improved

pricing and product mix, which offset

the lower volumes.

As a result, we delivered a much improved

operating margin of 10.2% compared

with the prior year (2022: negative 0.3%).

Looking ahead, we see attractive growth

opportunities in higher value talc

applications and remain focused on

driving improvement in this business.

Strategy

Our medium term strategy focuses on

high-value applications across selected

market segments, with an estimated

market size of $800 million, and growing

at approximately 4% per annum. Those

include, for example, electric vehicle

manufacturing, which utilises lighter,

reinforced plastics. We recently launched

the Finntalc K-line, which can strengthen

plastic by up to 20%, helping us gain

share in this high-growth market.

Talc is also a key raw material used in gas

particular filters, enhancing the ceramic’s

thermal stability. We have a strong track

record of identifying and developing

new product applications, with five new

products launched over the year, and

a new business pipeline of $50 million.

We believe this will help us deliver $15 million

of above market revenue growth by 2026.

Operating review

Performance Specialties

continued

Elementis plc

Annual Report and Accounts 2023

Risk management

Elementis faces a number of risks, uncertainties and opportunities in the ordinary course of

its operations. The effective identification, mitigation and ongoing management of these risks

underpins the delivery of the Group’s strategic objectives. Elementis has an established risk

management framework and system of internal controls to support decision making throughout

the financial year.

Top down

Oversight, identification,

assessment and

mitigation of risks

at a Group level

Bottom up

Identification, assessment

and mitigation of risks

across operational

and functional areas

Our risk management framework

Risk management systems are intended

to mitigate and reduce risk to the lowest

possible level, as complete elimination of

all risks is not possible. Risk management

processes can therefore only provide

reasonable assurance against material

misstatement or loss.

Our framework for

risk management

The Board has overall responsibility for

risk management and sets the Group’s

policies, culture and tone on risk as well

as providing oversight to management.

A comprehensive risk management

framework is in place to identify, assess,

mitigate and monitor the risks faced.

The Company places the highest priority

on preventing loss of life, harm to people

and the environment, legal and regulatory

breaches, and damage to reputation or

brand. The Group has in place policies,

procedures and guidance in order to

help the ELT and employees manage

risk in these areas.

Operational and supporting functions

Data Protection Steering Committee, HSE Council, Manufacturing

Council, Ethics & Compliance Council, Environmental Sustainability

Council, Diversity, Equity and Inclusion Council, Investment

Commitment Forum (Capital expenditure and allocation),

Product Stewardship & Regulatory Affairs and Internal Audit.

CEO

The CEO is responsible

for implementing

Group policies,

risk management

performance,

identifying principal

risks and ensuring that

resources are allocated

for effective risk

management

and mitigation.

Audit Committee

The Audit Committee

supports the Board

and has specific

responsibility for

monitoring financial

reporting as well as

the internal and external

audit programmes,

one of the primary

purposes of which is

to provide assurance

on financial, operational

and compliance

controls.

ELT individuals and

risk champions

ELT members have

responsibility for

managing and

monitoring risks

relevant to their

business or function on

an ongoing basis, and

work with the support

of risk champions to

further embed risk

management within

the organisation.

Board

The Board has overall responsibility for risk

management and sets the Group’s policies,

culture and tone on risk as well as providing

oversight to management.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Risk management

continued

Third line roles:

Internal audit

The third line of defence is assurance

over the effectiveness of mitigating

controls. This is provided by internal

and external assurance providers,

which are reviewed by management

and monitored and challenged by

the Audit Committee and the Board.

Second line roles:

Oversight functions

The second line of defence is

provided by the oversight functions,

which review and monitor current

and emerging risks using a bottom up

and top down approach and provide

relevant frameworks, policies and

processes for managing those risks.

First line roles:

Business operations

Our first line of defence is our

employees. They have a responsibility

to manage day-to-day risk in their

own areas, guided by Group policies,

procedures and control frameworks.

Local management, and ultimately the

ELT, ensure that risks are managed,

maintained, reviewed and actioned

according to these frameworks.

Risk heat map (gross impact)

High

Impact

Medium

Low

Global economic conditions and competitive

market pressures

Business interruption as a result of supply

chain failure of key raw materials and/or

third party service provision

Cyber security, IT networks,

data security and privacy

Regulatory compliance and

product stewardship

Business interruption as a result of a major

event or a natural catastrophe

Major regulatory enforcement action, litigation

and/or other claims arising from products

and/or historical and ongoing operations

Intellectual property and know-how/protection

Portfolio innovation and technology

Health and safety

People, talent and succession

Change vs 2022

Same

Increasing

Decreasing

High

Medium

Probability

Elementis plc

Annual Report and Accounts 2023

Risk culture

Every individual at Elementis has a

responsibility to manage risk, irrespective

of function, business or role. Risk

awareness exists throughout decision

making processes and is embedded in

systems, policies, procedures, leadership

and behaviours, and specific standards

such as the Code of Conduct. All

Company employees are responsible

for complying with related Company

policies and guidance and share

responsibility for ensuring that the

Company conducts its business in

a safe, lawful and ethical manner.

Risk appetite and tolerance

Risk appetite at Elementis is understood

as being the amount of risk that the

Board is prepared to accept in return for

reward. There is a degree of variability in

determining risk appetite, which may be

based on strategic objectives, as well as

guidance from management or advisers

with an understanding and analysis of the

nature of the risk. The strategic appetite for

risk is decided on a case-by-case basis at

Board level: for example, with respect to a

corporate transaction or significant capital

expenditure project, and delegated to

the ELT to implement as appropriate. The

maximum risk that can be taken before the

Company experiences financial distress is

also decided at Board level and mitigated,

as far as possible, by internal controls,

business continuity plans, insurance,

financial instruments and contracts.

Our risk review processes

Our Risk Management Policy defines

our approach to risk management.

The Board maintains an annual forward

planner to ensure that appropriate

focus is given at scheduled meetings

to discuss, review and monitor business

and operational performance, strategic

priorities, governance, compliance

and risk matters. This approach enables

the Board to engage directly with each

of the business units and functional

departmental leaders.

Each ELT member is responsible for

identifying, assessing and monitoring

their respective business and functional

risks as well as measuring the impact

and likelihood of the risk to the business.

Each identified risk is categorised as

strategic, commercial, operational,

financial or compliance.

On an annual basis the ELT collectively

reviews the enterprise risk universe

and the Board carries out a review of

the principal risks and uncertainties.

During the year the following risk

management activities have been

carried out:

Renewal of insurance programme

Risk registers reviewed and updated

quarterly, with clear ownership of

mitigating controls

Review of climate related risks and

scenario analysis

Launch of customer and supplier

risk screening policy and new

screening process

Continued compliance activity to

effectively manage risks relating

to trade sanction risks

Key areas of focus

during the year

During 2023 the Board carried out two

comprehensive reviews of the Group’s

principal risks; being those which

if they were to materialise, could have

a significant impact on the Group’s ability

to meet its strategic objectives over the

medium term.

The risk heat map on page 64 identifies

the key risks, pre-mitigation, that

Management consider most impactful to

the Group’s business model and the

delivery of its strategic objectives.

Movements on the risk heat map

reflect changes to the risk environment

since 31 December 2022 and are

summarised below:

Inflationary pressures and rising

interest rates continued to impact the

macroeconomic environment in which

the Group operates. During 2023

management focused on cost reduction

initiatives to help mitigate such

pressures. In particular, the Group

announced its Fit for the Future

programme which will deliver $20m

of cost savings by the end of 2025

Cyber security continues to be a

significant risk to the business. Process

improvements have been made,

including a new Crisis Framework and

Incident Response Plan. Management

continue to highlight potential cyber

threats to employees and additional

security controls were implemented

in the IT operating environment

People, talent and succession risks

have increased in light of the Fit for

the Future programme, which impacts

15% of the global workforce. Mitigating

controls have been put in place to

ensure adequate handover periods

between departing employees and

new hires, detailed knowledge transfer

plans have been created, and there are

frequent reviews of contingency plans

by the ELT

Health and safety risks have reduced

with the sale of the Chromium business.

Excluding Chromium, our TRIR in 2023

was 50% below 2022. This success is

due to the implementation of robust

management systems, safety culture

programmes, risk management

processes, and a continued focus

on process safety

There have been no material changes to

the risk profiles for the other principal risks,

although management continue to monitor

and review as appropriate.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Risk management

continued

Priorities for 2024

Successful execution of the Fit for the

Future programme

Assessment of the opportunities and

risks posed by AI

Continued horizon scanning for new and

emerging risks and detailed proposed

plans for mitigating such risks

Further enhancements to the risk

management framework, including

more systematic assessment of

sustainability risks in the Group’s

supply chain, in line with corporate

governance best practice

Finalising the Group’s SBT for GHG

emissions reduction, thereby helping

to minimise exposure to climate

change risks

Strengthen information security

governance with the appointment of

a dedicated Information Security Officer

Implementation of a partner risk

assessment programme for

supplier selection

Develop a supplemental database to

more effectively manage and review

the Group’s harmonised tariff codes

Leverage the outsourcing process to

streamline, automate and conform

our control processes globally

Continue to work constructively on

the challenges to the Group’s Finnish

mining permits, combined with

wider stakeholder engagement to

underpin the Group’s commitment

to responsible mining

Emerging risks

Emerging risks and opportunities are

identified and documented through the

existing risk management framework

using a variety of horizon scanning

methods, such as:

Monthly performance calls with

each business unit, including deep

dives on new business opportunities,

supply chain resiliency and

procurement matters

Annual and five year financial plans

and budgets

Board, ELT and other internal

governance forums

Customer/market insight and

industry specific data

Materiality assessment with regard

to ESG

Management continue to consider how the

Group could be affected by emerging risks

over the longer term and how strategic,

market and customer initiatives might

manage risks and seize new opportunities.

It is often possible to identify the potential

impacts of emerging risks, but it is more

challenging to predict their financial

impact, likelihood and timeframe – for

example, the climate scenario analysis

which was carried out as part of our

TCFD statement on pages 42-56.

Climate change

Climate change is an important

consideration for the Group (see pages

34-41), and management’s response

is a crucial part of the Group’s business

strategy; shaping both how products

are designed and how they are brought

to market. Climate change also brings

opportunities – for example, some of

the Group’s products can contribute

to lower energy and resource use

(see page 38). Elementis has an ambition

to reach Net Zero by 2050 and in 2024

management will set an SBT (via SBTi)

for GHG reductions.

The Group assesses climate related risks

using the same impact and likelihood

criteria as for the rest of its enterprise risks.

Management have used climate scenarios

from NGFS to help understand how climate

risks change in different futures and time

horizons. Climate change has been

identified as a contributing factor to many

of our principal risks and long term

uncertainties and further information on

the Group’s approach to climate related

risks can be found on pages 67-71.

Internal control

The key elements of the Group’s internal

control framework are monitored

throughout the year. The Audit Committee

has conducted a review of the

effectiveness of the Group’s risk

management and internal control

systems on behalf of the Board.

To support the Board’s annual assessment,

a report is prepared by the Global Head of

Risk and Controls on the Group’s principal

risks and internal controls. The report sets

out the Group’s risk management systems

and key internal controls, as well as the

work conducted in the year to assess and

improve the risk and control environment.

The internal control framework is intended

to effectively manage, rather than

eliminate, the risk of failure to achieve

business objectives. It can only provide

reasonable, not absolute, assurance

against the risk of material misstatement

or financial loss.

In accordance with the Financial Reporting

Council’s (“FRC’s”) guidance on Risk

Management, Internal Control and Related

Financial and Business Reporting, the

Board confirms that there is an ongoing

process for identifying, evaluating and

managing the principal risks faced by the

Group. This process has been in place

for the year under review and up to the

date of approval of the Annual Report

and Accounts. The process is regularly

reviewed by the Board and accords with

the relevant guidance.

For further information on internal controls,

please refer to pages 90-91.

Elementis plc

Annual Report and Accounts 2023

Principal risks and uncertainties

Description of risks

The Group is dependent on raw materials from various sources.

In the event of a long term supply disruption, or market volatility,

it may not be possible to secure sufficient supplies of raw materials

from alternative sources on a timely basis, or in sufficient quantities

or qualities, or on commercially reasonable terms. The lead time and

effort needed to establish a relationship with a new supplier could be

lengthy and could result in additional costs, diversion of resources

and reduced production yields.

Description of risks

The performance of the specific end-user markets served is affected

by macroeconomic conditions. Adverse developments that may

result in a downturn in macroeconomic conditions, or in the industries

in which our customers operate, may include political uncertainty,

retaliatory tariffs or other disputes between trading partners.

Suboptimal global economic conditions can affect sales,

raw material costs, foreign exchange rates, capacity, utilisation and

cash generation, which can impact the financial health of the Group.

Increased competitive pressure in the marketplace can

result in significant pricing pressure and loss of market share.

The impact of non-delivery of operating plans can lead to market

expectations of Group earnings not being met, and slower delivery

of strategic priorities.

Global economic conditions and

competitive market pressures

Business interruption as a result

of supply chain failure or

key raw materials and/or

third party service provision

Links with climate change

The global response to climate change introduces additional

uncertainties in macroeconomic and market trends which may

have both positive and negative impacts on the Group. Customers

increasingly collect climate related information in preparation for

future sourcing decisions. The Group understands its emissions

footprint, including Scope 3, and aims to reach Net Zero emissions

by 2050. Management are in the process of quantifying carbon and

environmental footprints at a product level to better demonstrate

impact and progress. See page 37.

Controls and mitigating activities

Financial performance (monthly sales, profit and cash flows and

position against key banking covenants) is closely monitored with

full year scenario planning of key risks, regular reforecasts and

prompt investigation of variances

Contingency and cost reduction plans can be implemented in

the event of an economic downturn to reduce operating costs,

including non-essential capital expenditure items and

discretionary spend

Interest, currency and commodity hedging actions are taken

as appropriate to mitigate the impact of rising interest rates

and inflation

Global key account management programme to deepen existing

relationships with our largest customers and help to pre-empt

end market changes

Balanced geographic footprint and supply chain and broad

differentiated product offering across different sectors

Developments in year

Continued focus on cost reduction, capital expenditure

effectiveness, working capital and discretionary spend

Price rises implemented to mitigate the impact of raw

material, logistics and energy cost increases

Links with climate change

Climate change will increase the frequency and severity of extreme

weather events that may result in supply chain disruption. Elementis

manages its supply chain through maintaining minimum stock levels

and qualifying multiple suppliers. See page 38.

Controls and mitigating activities

Review of single source materials; find and qualify alternatives

Market research to understand and monitor the impact of

short term events

Recalibration of inventory stock levels and lead times on

a regular basis

Business continuity scenario planning overseen by the ELT

Proactively identify and mitigate risks across the supply chain

Implement robust contingency plans to address potential

disruptions and maintain resilience

Increase flexibility in the Group’s manufacturing network

to supply products from different regions, including new

manufacturing locations

Developments in year

Continued leverage of strategic supplier relationships to secure

required raw material volume

Accelerated production qualification programme to ensure

the ability to redistribute production volume across our global

manufacturing network

Continued focus on qualification of new sources of supply

Enhancement of the Group’s global supply chain and

procurement teams

Continued focus on the Group’s Global Supply strategy to ensure

a resilient global production footprint, enabling Elementis to

continue to produce as new risks materialise in the years to come

Link to strategic objective: Movement in year:

Innovation Growth Efficiency

1 2

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Principal risks and uncertainties

continued

Description of risks

The Group increasingly relies on IT systems for its internal

communications, controls, reporting and relationships with customers

and suppliers.

A significant disruption could cause delays to key operations and

an inability to meet customers’ requirements, thereby resulting in

increased operating costs, legal liability and reputational damage.

In addition, continuing developments in data protection legislation

globally have created a range of compliance obligations with

increased financial penalties for non-compliance.

Cyber security continues to be an increasingly significant risk to

the business and there remains ongoing work to review and

strengthen the Group’s security systems.

Description of risks

Emerging and existing regulations in global markets can lead to

hurdles and additional costs in delivering on strategic objectives.

Non-compliance or suspected non-compliance could lead to

regulatory action.

Cyber security, IT networks,

data security and privacy

Regulatory compliance and

product stewardship

Links with climate change

Not applicable.

Controls and mitigating activities

Security controls, including policies and procedures, staff

awareness and training, risk management and compliance,

systems and information management and protection process

Regular IT, cyber and data protection updates to the Board

Business continuity and emergency response plans for

each manufacturing site

Regular internal audit reviews

Privacy and data protection platform

Developments in year

Continued phishing simulations in order to raise awareness and

assess training needs

Introduction of a Global Crisis Framework and a revised Incident

Response Plan

Crisis response workshop completed with ELT

Implementation of advanced phishing controls to further address

human risk

Improved data protection through enhanced access controls

Introduction of an operational technology detection and

response tool

Decision made to appoint a dedicated Information Security

Officer in 2024

Links with climate change

Elementis continuously works to improve energy efficiency at all

sites (see page 34). International Sustainability Standards Board

(“ISSB”) and Corporate Sustainability Reporting Directive (“CSRD”)

regulations ensure rigour in our corporate disclosure and marketing

documents, and management are preparing for full ISSB and

CSRD compliance.

Controls and mitigating activities

The Global Product Stewardship & Regulatory Affairs team

oversees, manages and monitors regulatory developments in

various jurisdictions

SDS, labels and regulatory information are provided for global

customers specific to the requirements in their jurisdiction

Active compliance and risk management programmes in place

(including policies, procedures and training)

Regular reviews of the evolving regulatory landscape in current

and new markets

Regulatory Compliance and Product Stewardship risks

continue to be regularly updated and reviewed with the Board

Developments in year

The Company’s expansion permits in relation to two of its

talc mines in Finland were revoked by the Finnish courts after

challenge by environmental groups. In relation to these decisions,

the Company has filed an appeal and an application for leave

to appeal, with decisions expected between 2025 and 2026.

The Company continues to enhance its Responsible Mining

programme and, as part of this, to engage with local stakeholders

in Finland in relation to its activities

UK REACH, Turkey REACH and South Korea REACH planning

and assessment

Ingredient notifications in existing markets with new requirements

were completed

Ongoing support of manufacturing optimisation change through

regulatory activities

Link to strategic objective: Movement in year:

3 4

Elementis plc

Annual Report and Accounts 2023

Description of risks

The ability of the Group to manage its operations successfully and

achieve performance in line with its strategy, business plans and

budgets depends on the efficient and uninterrupted operation of

planning processes, operational delivery capabilities and the internal

control environment. Production facilities may be subject to planned

and unplanned shutdowns, turnarounds and outages including

for natural catastrophes, weather, climate change or disruption

associated with transportation, utilities and distributors, which could

result in increased costs in securing alternative facilities, significant

time to increase production or customer qualification.

A major event is categorised as an operational, HSE, transport or

workplace incident caused by system failure and/or human error,

or by fire, storm, flood or pandemic.

Description of risks

The scale and complexity of the Group’s operations means that it is

subject to a wide range of international regulation spanning all aspects

of its business. The regulatory sphere includes multiple corporate

taxation regimes, national and supra-national anti-corruption, fair

competition and data privacy laws, as well as applicable environmental

regulations and standards relating to the Group’s past and present

operations. Failure to comply can lead to complex cross border

claims, litigation, damages, fines, penalties and remediation orders.

The Group may be involved in legal proceedings and claims within the

ordinary course of business, including legacy claims in relation

to businesses that have been acquired or disposed of by the Group.

Adverse results in legal proceedings could result in reputational and

financial damages, loss of business, and diversion of management

time and resources.

Business interruption as a result of a

major event or a natural catastrophe

Major regulatory enforcement

action, litigation and/or other

claims arising from products and/or

historical and ongoing operations

Links with climate change

Climate change is likely to increase the frequency and severity of

extreme weather events which may result in operational and supply

chain disruption. Elementis’ sites are designed and maintained

to withstand extreme weather and the Group’s supply chain

management ensures minimum stock levels and the qualification

of multiple suppliers. See page 37.

Controls and mitigating activities

Preventative maintenance, critical spares, process and other

safety procedures to mitigate the effects of a major incident

Property damage and business interruption insurance coverage

Each site has developed a business continuity plan that includes

emergency response and business recovery protocols, annual

reviews, periodic updates, training and practising the plan

via periodic drills or table top exercises

Management verify the emergency response and crisis

preparedness elements of business continuity through the

HSE compliance auditing process

Business continuity scenario planning overseen by ELT

HSE management programme includes corporate compliance

audits and insurance property surveys

HSE matters reviewed by ELT on a monthly basis

Developments in year

Internal audit review of manufacturing sites

Continued focus on operational reliability

Insurance property survey recommendations adopted and tracked

Links with climate change

Not applicable.

Controls and mitigating activities

Cross functional expertise including Legal, Compliance, Finance,

HSE and Product Stewardship & Regulatory Affairs, supported by

external consultants and advisers, actively monitoring emerging

risks and ensuring controls in relation to known risks, is effective

Products are routinely and rigorously tested to the highest standards

Continuous evolution of the global compliance programme

to identify, address, monitor and mitigate compliance risks,

including through new processes, training and other activities

Insurance programme and risk transfer strategy in place to

mitigate potential financial losses

Audit Committee and Board exercise oversight through regular

reports on all threatened and actual litigation from the Group

General Counsel & Company Secretary

Employees are subject to a range of policies and procedures

setting out required behaviours and standards, and consequences

for non-compliance

The Ethics & Compliance Council, chaired by the Group General

Counsel & Company Secretary, meets regularly to monitor the

Group’s compliance culture and ensure that ethics and compliance

considerations are appropriately weighted in business decisions

The Data Protection Steering Committee meets regularly to

oversee compliance with applicable data privacy laws

Regulatory Compliance and Product Stewardship risks continue

to be updated and reviewed with the Board as new risks arise and

new developments are made on ongoing issues. Working groups

are in place for a number of regulatory areas

Developments in year

The divestiture of the Chromium business in January 2023

reduced the Group’s overall exposure to claims and enforcement

actions relating to environmental matters

Launch of Customer and Supplier Risk Screening Policy and

new screening process

Link to strategic objective: Movement in year:

5 6

Innovation Growth Efficiency

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Principal risks and uncertainties

continued

Description of risks

Failure to adequately protect and preserve IP and proprietary

know-how in both existing and new markets could harm the

Group’s competitive position.

Description of risks

The ability of the Group to compete is highly dependent on its ability

to meet the changing needs of customers and keep pace with

technological innovations and sustainability trends.

New or substitute products and technologies developed by

competitors could erode the Group’s ability to compete and lead

to declines in sales and market share.

Intellectual property and

know-how/protection

Portfolio innovation

and technology

Links with climate change

Not applicable.

Controls and mitigating activities

Active management of the Group’s trademark portfolio via

an internal Trademark Committee (TMC), attended by the

Group’s external trademark advisors, comprising the business

segment’s Marketing Directors, Corporate Communications and

Legal. The TMC meets regularly to take decisions in relation to

the registration of new trademarks and defensive activity in relation

to existing marks. The TMC is supported by a global network

of trademark agents who represent the Group’s interests in all

relevant jurisdictions

The Group’s Science Director works closely with the Legal team

and external patent attorneys to ensure emerging inventions are

appropriately protected

Employees are trained on the importance of appropriate handling

and disclosure of proprietary and confidential information

The Legal team reviews confidentiality agreements entered into by

the Group to assess the suitability of the proposed purpose and

the duration of the confidentiality obligations. A central record of

all confidentiality agreements entered into globally is maintained

by the Legal team

Contentious IP matters are reported to the Audit Committee

and Board

The Group’s stage gate system incorporates IP and freedom to

operate as requirements to launch new products

Developments in year

Patent and IP disclosures to keep distinction in new launches

Enforcement of proprietary advantage

Annual patent portfolio review

Links with climate change

Climate change and increased focus on sustainability drives demand

for products with lower climate impacts and more efficient resource

use. The Group is increasing the range of products it offers with

high naturally-derived material content. In addition, management are

assessing the Group’s portfolio in a systematic way to identify and

prioritise opportunities to improve product sustainability.

Controls and mitigating activities

The Global R&D team aims to develop new products and

technologies used in an evolving market to meet the changing

needs of the Group’s sophisticated customers

Collaborative relationships with customers and industry

formulators ensures efforts are aligned with the latest

market trends

Use of an innovation tool to manage stage gate process,

with systematic prioritisation to deliver high value solutions

for the market

The Group’s proprietary Hectorite and Talc enable the Group

to consistently deliver high performance innovation

Developments in year

12 new products launched in 2023

Open innovation with strategic partners

Link to strategic objective: Movement in year:

7 8

Elementis plc

Annual Report and Accounts 2023

Description of risks

The inherent nature of manufacturing activities, such as material

handling, production, storage and transport have wide ranging

occupational safety and process safety risks. Failure to recognise,

evaluate and mitigate health and safety risks would leave the Group

vulnerable to employee and contractor injuries, lost production time,

equipment damage, impact to the community, potential regulatory

compliance challenges, and reputational damage.

Description of risks

The Group operates in highly competitive labour markets and relies

upon the expertise and services of talented individuals and teams

to succeed.

Loss of key people or disruption to teams without timely action

could result in disruption to business operations.

Health and safety People, talent and succession

Links with climate change

Employees increasingly wish to contribute to addressing climate

change. The Group’s Net Zero ambition and commitment to SBTs

supports the Employee Value Proposition.

Controls and mitigating activities

Performance management process for all employees to set

goals aligned to key priorities and actions for personal and

professional development

Career profile allowing employees to create their personal profile

and future aspirations

Succession planning to build a diverse leadership pipeline;

the senior leaders are reviewed twice a year by the ELT and

the ELT are reviewed once a year by the Board

Measurement of employee engagement to create actionable plans

People manager training and toolkits, empowering growth

and impact

Unlimited access to LinkedIn Learning to allow employees to

expand their skills based on their own learning needs

Flexible working

Creation of knowledge transfer plans facilitated by external

consultants, retention packages for key employees and

creation of searchable databases to ensure historic knowledge

remains accessible

Developments in year

New engagement survey in collaboration with Gallup

Performance management approach transitioned from

task-orientation to focusing on engagement and development

Global and local people manager training sessions conducted

in local languages, aligned with the specific needs of

people managers

Change management training provided to people managers

to allow additional support in leading through change as we

deliver the Fit for the Future programme

Introduction of a new onboarding app to ensure a smooth

transition into Elementis for new hires

Continued enhancements to succession planning in order

to improve internal talent development and progression.

Orderly transition to new leaders in global supply chain,

manufacturing and procurement

Link to strategic objective: Movement in year:

9 10

Links with climate change

Not applicable.

Controls and mitigating activities

Safety Leadership – HSE certification process required for all site

leaders, setting clear expectations of their responsibility for ensuring

employee safety and providing them with leadership training/tools

Reshaped Global HSE Strategy and Roadmap (through 2026)

aligned with goals and incident trends, and establishment of

meaningful leading and lagging key performance indicators

Compliance and insurance audits, root cause analyses,

management of change, routine inspections, risk assessments,

training, contractor management and work permits

Safety culture promotion – increased employee engagement

via an incentive programme promoting safety through SWA;

near miss reporting, hazard recognition, inspections and risk

assessments participation. ‘Call to Action’ initiative leading to

over 100 actions developed based on employee feedback

Continued implementation of hazard recognition processes to

improve employee awareness and mitigation of hazards

Process safety management – phase 1 process improvement

plans for all high risk tasks through process hazard analyses, and

ensuring equipment mechanical integrity through capital investment,

equipment assessments and suitable preventative maintenance

Developments in year

Improved accountability and analytics in the management of

HSE and quality incidents, action tracking, audit management,

and regulatory compliance

Increased use of innovation and technology for incident reporting

and risk assessments

Development of a global HSE framework aligned to ISO standards

and publication of life critical HSE standards

Implementation of a formalised process safety management

standard including key elements such as management of change,

hazard analyses and mechanical integrity

Third annual Global Safety and Health Week, including technical

speakers and local activities

Enhanced communication of HSE through centralised document

repository, including HSE standards and incident learnings

Implementation of a formalized process safety standard including

integration of key essential elements such as management of

change, hazard analyses and mechanical integrity

Embedding TogetherSAFE, our value for safety, into our work

planning and business processes; holding third annual CEO

TogetherSAFE award promoting team safety initiatives

Innovation Growth Efficiency

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Viability and going concern statement

Going concern

The Directors are satisfied that it

is appropriate for the Group and

the Company to adopt the going concern

basis of accounting in preparing these

Group and parent company financial

statements and that there are no material

uncertainties impacting the ability of

the Group and Company to continue

to operate over a period of at least

12 months from the date of approval

of these financial statements.

To support this assessment the Directors

produced three models, covering a future

period of five years from the date of these

accounts, demonstrating the position of

the Group regarding its two financial

covenants, net debt/EBITDA and interest

cover, at each measurement period for the

12 months following the date of signing of

these accounts and annually thereafter.

These models comprised:

A base case scenario, aligned to the

latest Group annual operating plan

for 2024, as well as the Group’s five

year plan;

A possible downside scenario that

assumes the global economic

environment is severely depressed

over the assessment period; and

A reverse stress test, flexing

sales to determine what circumstance

would be required to breach the

financial covenants.

No breaches in the required covenant

tests were reported during the year and

under both the base case and severe but

plausible downside scenarios the Group

is expected to remain within its financial

covenants throughout the going concern

period. The conditions necessary for the

reverse stress scenario to be applicable

were deemed to be remote.

The Directors also considered factors

likely to affect future performance and

development, the Group’s financial

position, the current excess liquidity

position, the high level of cash conversion

and the principal risks and uncertainties

facing the Group; including the Group’s

exposure to credit, liquidity and market

risk and the mechanisms available for

mitigating these risks.

The Group’s net debt position as at

31 December 2023 was $202m. It has

access to a syndicated revolving credit

facility of $375m, of which $71.6m has

an expiry date of September 2024 and

$303.4m has an expiry date of September

2025, and long term loan facilities of

$100m and €142m which have an

expiry date of June 2026.

The Group had further borrowing facilities

available to it, aside from the syndicated

revolving credit facility and term loans,

of over $12m as at 31 December 2023.

In conclusion, after reviewing the base

case scenario, the severe but plausible

downside scenario and considering the

likelihood of the reverse stress test

scenario occurring to be remote, as well as

having considered the uncertainty relating

to the Group’s principal risks and the

mitigating actions available, the Directors

have formed the judgement that at the

time of approving these consolidated

financial statements there are no material

uncertainties that cast doubt on

the Group’s going concern status for

next 12 months and that it is therefore

appropriate to prepare the consolidated

accounts on the going concern basis.

Business viability

assessment

The basis of the assessment included

a detailed review of strategic and operating

plans, underpinned by five year financial

forecasts, including profit and loss and

cash flows. Consideration was given to

capital expenditure, investment plans,

returns to shareholders and other financial

commitments, as well as the Company’s

debt bearing capacity, its financial

resources, borrowings and the availability

of finance. No review of business plans

and financial forecasts would be complete

without a robust assessment of the risks

and opportunities in such planning models

and the assumptions used. The review

included consideration and discussion of

the materials prepared and presented to

the Board by management and its advisers

(where appropriate), as well as additional

information requested by the Board.

The Board’s programme of monitoring

major risks is an important component

of the business viability assessment and

the financial impact of the principal risks

was modelled over the five year period.

Business and segment growth scenarios,

rate of return on investments, assumptions

on global GDP growth rates, relevant

currency rates, and commodity prices

in business plans and financial forecasts

were all considered, with stress testing on

financial models where appropriate. Finally,

a review of litigation and tax reports, legal

and compliance risks throughout the year

and a formal year end risk review, ensures

that the viability statement is made with

a reasonable degree of confidence.

Principal risks

For each principal risk that is deemed to be

both permanent and likely to have a high

impact, a severe but plausible scenario

was considered. In making the business

viability statement, the Board reviewed and

discussed the overall process undertaken

by management and assessed the

outcome of the stress-testing carried

out using the Group’s five year financial

forecast as the base case. The five year

financial forecast considers the Group’s

cash flows, interest cover covenant, net

debt/EBITDA covenant, and other key

financial ratios over the period. These

metrics were assessed against the Group

risk register to determine the most

impactful ones to stress test against.

Consideration was also given to the

potential impact of the Group’s climate

risk scenarios.

Business viability statement

In accordance with the UK Corporate

Governance Code provision 31, the

Directors have reviewed the Group’s

current position and carried out a robust

assessment of the principal risks and

uncertainties that might threaten the

business model, future performance,

and solvency and liquidity of the Group,

including resilience to such threats, and

consider that they have a reasonable

expectation that the Group will be able to

continue in operation and meet its liabilities

as they fall due over a period of at least five

years. A period of five years was chosen as

being consistent with the Group’s business

and financial planning models, R&D plans,

a number of key supply contracts and

requirements for external borrowing

facilities. Regarding accessibility to

financing, the majority of the RCF currently

has an expiry of September 2025 and the

term loans have an expiry of June 2026;

both of these are within the five year

period and so will require renegotiation

or replacement. Elementis has, to date,

had a very supportive banking syndicate

and due to recent deleveraging there is

now a materially lower requirement for

debt financing; as such the Directors

do not believe that there will be any

issues in renegotiating lending facilities

when necessary.

Strategic report

The Strategic report was approved by the

Board of Directors on 6 March 2024 and

is signed on its behalf by:

Paul Waterman

CEO

Ralph Hewins

CFO

Elementis plc

Annual Report and Accounts 2023

Purpose, culture and values

Our purpose – unique chemistry,

sustainable solutions – guides our strategy

and priorities and underpins our decision

making as a Board. The Company’s values

of Safety, Solutions, Ambition, Respect and

Team underpin our culture, align with our

purpose and drive our business success.

The completion of the sale of our

Chromium business in 2023 resulted

in the Company becoming a focused

specialty chemicals business which

will operate in a regional organisational

structure in a way that is Fit for the Future,

driving the innovation of specialty chemical

products that deliver cleaner and better

performance for our customers.

Board succession

and diversity

Steve Good will step down from the Board

at the conclusion of the Annual General

Meeting (“AGM”) after reaching a tenure of

nine years on the Board in October 2023.

I would like to take this opportunity to thank

Steve for his very significant contribution

to the Board and his leadership of the

Remuneration Committee.

In anticipation of Steve’s retirement from

the Board, succession planning was

a focus for the Board during the year and

a thorough recruitment process for a new

Non-Executive Director was conducted.

Following this process, we were delighted

to welcome Maria Ciliberti to the Board

in March 2024. Maria’s skills, background

and experience strongly complement the

existing skills and experience of Board

members. Maria will stand for election

at the AGM in 2024.

I can report that, as at 31 December 2023,

37.5% of the Board were women (there

were five men and three women on our

Board). With the appointment of Maria

Ciliberti, I am pleased to report that we

now meet the new Listing Rules target

(also referred to in the FTSE Women

Leaders Review) for female representation

on the Board to be at least 40%, with

44.5% of the Board now women. Following

Steve Good’s retirement from the Board

at the conclusion of the AGM, female

representation on the Board is expected

to be 50%.

The Board also meets the target referred

to in the new Listing Rules and in the

Parker Review for there to be at least one

individual on the Board from a minority

ethnic background. We will continue to

ensure that the benefits of diversity are

appropriately considered in the context

of any future Board recruitment.

Further information on Board diversity is

set out on pages 86-87.

Net Zero transition plan

The Board carefully considered the

proposed adoption of a science-based

target (“SBT”) for reduction in our

greenhouse gas (“GHG”) emissions

by c.2030, and a related update to the

Company’s long-term ambition statement

from ‘carbon neutral’ to ‘Net Zero by 2050’,

at the latest.

As part of these considerations, the Board

took into account the expectations of its

stakeholders with regard to management

of the Company’s GHG footprint and its

alignment with the UK’s commitment to

a GHG reduction pathway.

As a result, the Board was pleased to

approve the form of the Company’s first

Net Zero transition plan, and a proposal

to validate an SBT via the science-based

target initiative (“SBTi”) by the end of

2024. Further information on our climate

strategy can be found on pages 34-41.

Board effectiveness

The Board undertook the annual evaluation

of its effectiveness internally this year,

having completed a full externally facilitated

Board performance evaluation in 2021.

I am pleased to report that this resulted in

a positive assessment of the effectiveness

of the Board and its Committees, with the

focus on strategy seen as a particular

highlight (as demonstrated during the

Capital Markets Day (“CMD”) held in

November 2023).

Wider employee feedback from those who

interacted with the Board during the year

reflected the view that the Board was

approachable and engaged. Further

details of the process followed and its

outcomes are set out on page 83.

During 2023, the Group General Counsel

& Company Secretary conducted a tender

process on behalf of the Board to identify

and appoint a new external evaluator to

perform an externally facilitated evaluation

of the Board’s performance in 2024

(the Board having worked with the

same external evaluator for two prior

external evaluations).

Annual General Meeting

The AGM is an important event in the

Company’s corporate calendar, providing

an opportunity to engage with shareholders.

This year, we will again be holding a hybrid

AGM, with shareholders able to attend the

meeting in person to vote and ask questions,

or view the meeting via a live webcast.

Shareholders can also ask questions

in advance of the meeting via email:

company.secretariat@elementis.com.

Instructions on how to register and join

the webcast are set out in the Notice

of Meeting, which is available on the

Company’s website.

John O’Higgins

Chair

John O’Higgins

Chair

Chair’s introduction to governance

Dear Shareholders,

On behalf of the Board, I am pleased to introduce our

Governance report for year ended 31 December 2023.

This report sets out our approach to effective corporate

governance and outlines key areas of focus of the Board and

the activities it undertook during the year, as we continue to

drive long-term value creation for our stakeholders. I am grateful

to my fellow Board members for their continued support.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Committee

Chair

Audit

Committee

Nomination

Committee

Remuneration

Committee

Board of Directors

John O’Higgins

Chair

Paul Waterman

Chief Executive Officer

Ralph Hewins

Chief Financial Officer

N R

Tenure

John was appointed Non-Executive Chair

and Chair of the Nomination Committee on

1 September 2021. John joined the Board as a

Non-Executive Director on 4 February 2020 and

was appointed Senior Independent Director on

29 April 2020 prior to his appointment as Chair.

Independent

Yes

Experience and role

John served as chief executive of Spectris plc

from January 2006 to September 2018, leading

the business through a period of significant

strategic transformation and development.

Prior to Spectris plc, John spent 14 years at

Honeywell International in a number of senior

management roles, including chairman of

Honeywell Automation India and president

of Automation & Control for Asia-Pacific.

His early career was spent at Daimler Benz

A.G. as a research and development engineer.

Previous non-executive director roles include

Exide Technologies, a US based supplier of

battery technology to automotive and industrial

users (from 2010 to 2015).

John holds a master’s degree in Mechanical

Engineering from Purdue University (US)

and an MBA from INSEAD.

External appointments

Trustee of the Wincott Foundation

Non-executive director of Oxford

Nanopore Technologies plc and a member

of the audit, risk, remuneration and

nomination committees

Non-executive director of Johnson Matthey

plc and a member of the audit, nomination

and remuneration committees

Adviser to Envea Global, a market leader

in environmental air and emissions

measurement and majority owned by

The Carlyle Group

1 On appointment.

Tenure

Paul was appointed Chief Executive Officer

(“CEO”) on 8 February 2016.

Independent

Experience and role

Paul has a proven track record in developing

markets, products and opportunities for creating

value, business optimisation and transformation.

Paul’s global experience provides the skill set

required to deliver the Company’s strategy

and provide inspiring leadership.

Prior to joining Elementis, Paul was global

CEO of the BP Lubricants business in 2013 after

having overseen the BP Australia/New Zealand

downstream business. In 2010, Paul was

country president of BP Australia. Prior to this

he was CEO of BP’s global aviation, industrial,

marine and energy lubricants businesses

(2009 to 2010) and CEO of BP Lubricants

Americas (2007 to 2009). He joined BP after

it acquired Burmah-Castrol in 2000, having

joined the latter in 1994 after roles at Reckitt

Benckiser and Kraft Foods.

Paul holds a BSc in Packaging Engineering

from Michigan State University and an MBA

in Finance and International Business from

New York University, Stern School of Business.

External appointments

None

Tenure

Ralph was appointed CFO-Designate and

Executive Director on 12 September 2016

and became the Elementis Group Chief

Financial Officer (“CFO”) on 1 November 2016.

Independent

Experience and role

Ralph is an accomplished CFO who has a strong

track record in finance, strategy development

and implementation, and M&A which enables

him to provide effective financial leadership to

underpin the delivery of the Company’s strategy.

Ralph had a 30 year career with BP, where

he held a number of significant leadership

positions, including roles in financial

management, sales and marketing, corporate

development, M&A, strategy and planning.

In 2010, Ralph was CFO of BP Lubricants

and served on the board of Castrol India

Limited from 2010 until 2016.

Ralph holds an MA in Modern History and

Economics from the University of Oxford

and an MBA from INSEAD.

External appointments

None

The right skills to deliver our strategy

Elementis plc

Annual Report and Accounts 2023

Dorothee Deuring

Independent Non-Executive Director

Steve Good

Independent Non-Executive Director

Trudy Schoolenberg

Senior Independent Director

A N RR N A N R

Tenure

Steve joined the Board as a Non-Executive

Director on 20 October 2014 and became

Chair of the Remuneration Committee on

25 April 2017.

Independent

Yes

Experience and role

Steve has strong and relevant international

experience in specialty chemicals businesses,

manufacturing and diverse industrial markets,

which enables him to provide guidance and

challenge to management. Steve’s involvement

with remuneration committees in other

organisations enables him to provide judgement

and demonstrate sound knowledge of topical

remuneration matters in his capacity as

Remuneration Committee Chair.

Steve was chief executive of Low & Bonar

plc between September 2009 and

September 2014.

Prior to that role, he was managing director of its

technical textiles division (2006-2009), director

of new business (2005-2006), and managing

director of its plastics division (2004-2005).

Prior to Low & Bonar, he spent ten years with

BTP plc (now part of Clariant) in a variety of

leadership positions managing international

specialty chemicals businesses. Steve served

as non-executive director and chairman of

the remuneration committee of Cape plc

(2015-2017), non-executive director of

Anglian Water Services and member of the

audit committee, nomination committee and

remuneration committee (2015-2018) and non-

executive director of Dialight plc (2018-2020).

Steve holds a degree in Economics and

Financial Management from Sheffield University.

He is a chartered accountant.

External appointments

Non-executive director and non-executive

board chair of Norcros plc

Tenure

Dorothee was appointed a Non-Executive

Director on 1 March 2017.

Independent

Yes

Experience and role

Dorothee provides the Board with valuable

insight into the wider European chemicals

and Industrial sectors as well as sector

specific acquisition expertise.

Dorothee manages her own corporate advisory

consultancy serving a number of European

clients in the pharma/biotech sector. She is

active in various industry bodies. Her previous

executive roles included managing director

and head of Corporate Advisory Group (Europe)

at UBS in Zurich, head of M&A chemicals

and healthcare at a private investment bank

in Germany and a senior executive in the

corporate finance department at the

Roche Group.

Dorothee served as non-executive director

of the supervisory board of Bilfinger SE

and member of the audit committee

(May 2016–May 2021).

Dorothee holds a master’s degree in Chemistry

from the Université Louis Pasteur, Strasbourg,

and an MBA from INSEAD.

External appointments

Non-executive director of

PolyPeptide Group AG

Non-executive director of Temenos AG

Tenure

Trudy was appointed Non-Executive Director

on 15 March 2022 and become Senior

Independent Director on 26 April 2022.

Independent

Yes

Experience and role

Trudy has over 30 years’ experience of

working in the chemicals, engineering and

high performance product sectors.

Having built her executive career with global

organisations such as Shell, Wartsila and

Akzo Nobel, she brings a strong international

perspective and a proven track record for

driving sustainability through innovation.

In addition, Trudy has strong operational

knowledge, gained during her time at Shell

as production manager at the Pernis refinery

in the Netherlands, the largest refinery in

Europe and one of the largest in the world.

Trudy currently serves as a non-executive

director and senior independent director

of Accsys Technologies plc (AIM listed

sustainable building materials business),

a supervisory board member of SPIE SA

(a listed technical services business) and

as a non-executive director and senior

independent director of TI Fluid Systems plc

(a listed global manufacturer of automotive

systems). Trudy previously served as a board

member of The Netherlands Petroleum

Stockpiling Agency (COVA) (2011-2021),

non-executive director and senior independent

director at Spirax-Sarco Engineering plc

(2012-2021), non-executive director and

senior independent director of Low and Bonar

plc (2013-2020) and as a supervisory board

member of Avantium N.V. (2020-2022).

Trudy has a PhD in Technical Physics

from the Delft University of Technology

(the Netherlands) and holds a master’s

degree in Industrial Engineering.

External appointments

Non-executive director and chair of

Accsys Technologies plc

Independent director of SPIE SA

Senior independent director of

TI Fluid Systems plc

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Anna Lawrence

Group General Counsel &

Company Secretary

Christine Soden

Independent Non-Executive Director

Clement Woon

Independent Non-Executive Director

Tenure

Anna joined Elementis in March 2021.

Experience and role

Anna has responsibility for all legal and

compliance matters across the Group and

is the Group Company Secretary. Anna also

serves as the Group’s Chief Compliance Officer

and chairs the Ethics & Compliance Council.

She has extensive international experience

gained through holding senior legal positions

in companies across diverse sectors including

Rolls-Royce plc, Johnson Matthey plc and

Kingfisher plc. She qualified as a solicitor at

Allen & Overy LLP. She holds a BA in Modern

Languages from the University of Oxford,

a Postgraduate Diploma in Law and Legal

Practice from BPP Law School and is an

Associate of the Chartered Governance Institute.

A N RA N R

Tenure

Christine was appointed a Non-Executive

Director on 1 November 2020 and is the

Designated Non-Executive Director for

workforce engagement and Chair of the

Audit Committee.

Independent

Yes

Experience and role

Christine brings significant experience of

innovation and the commercialisation of

technology to the Board. Christine is an

experienced CFO with a strong track record

of leading a range of private and public

companies rooted in innovation with

a particular focus on biotechnology, life

sciences and pharmaceutical products.

Christine was CFO and company secretary

of Acacia Pharma Group plc, a public quoted

provider of pharmaceutical products designed

to improve the outcomes and recovery for

surgical patients (2015-2020). Prior to Acacia

Pharma Group plc, Christine served as CFO

and then non-executive director of AIM-listed

Electrical Geodesics, Inc., which was acquired

by Philips NV in 2017. Other CFO and finance

leadership roles include Optos plc, BTG plc

(former FTSE250 constituent), Oxagen

Limited and Celltech Chiroscience Group plc.

Christine started her life-sciences career

as financial controller of Medeva plc.

Christine has previously served as chair of

the audit committee at e-therapeutics plc,

an AIM listed technology based drug discovery

platform (2017-2020) and at Provalis plc,

a quoted healthcare business (2000-2005).

She was also non-executive director of

Futurenova Limited, a provider of antimicrobial

cases for iPads and iPhones from 2017 to 2021.

Christine is a chartered accountant and holds

a degree in Mathematics from the University

of Durham.

External appointments

Non-executive director of Cell and

Gene Therapy Catapult

Non-executive director of

Arecor Therapeutics plc

Tenure

Clement was appointed a Non-Executive

Director on 1 December 2022.

Independent

Yes

Experience and role

Clement brings broad managerial experience

in globally operating technology and consumer

related industries. He has a strong track record

of renewing traditional industries and revitalising

growth through strategic interventions and

in-depth experience and knowledge of markets

within the Asia Pacific region.

Clement was Group CEO of Saurer Intelligent

Technology Co Ltd, a €1 billion textile machinery

and components business listed on the

Shanghai Stock Exchange, between August

2016 and March 2020. Clement continued to

serve on the board of Saurer as non-executive

director until August 2021. Between March

2021 and January 2023, Clement served as

Chairman of PFI Foods Industries Pte Ltd.

Between April 2014 and July 2016, Clement

was Adviser and co-CEO of Jinsheng Industry

Co. Ltd, an industrial company in China with

diverse interests including biotech, automotive

and textiles. Clement also previously held

various senior positions at companies based

in Switzerland and Singapore, including Division

CEO of Leica Geosystems AG, President &

CEO of SATS Ltd, and CEO Textile Division

of OC Oerlikon AG.

Clement holds an MSc in Industrial Engineering

and a BEng in Electrical Engineering from the

National University of Singapore, as well as

an MBA in Technology Management from

Nanyang Technological University, Singapore.

External appointments

Non-independent non-executive director

of PFI Foods Industries Pte. Ltd

Non-executive director of

Morgan Advanced Materials plc

Maria Ciliberti

Independent Non-Executive Director

Maria’s appointment as a Non-Executive

Director is effective as of 11 March 2024.

Maria’s professional experience spans over

35 years in the petrochemical industry

and includes roles in manufacturing, R&D,

commercial and business management.

She worked at The Dow Chemical Company,

Columbia Gas of Ohio and Container

Corporation of America in the USA.

She also spent over a decade in global

leadership roles in Europe, with Celanese,

General Electric Plastics (now owned by

SABIC) and Borealis, where her last role

was Commercial Vice President for Borealis’

Global Specialty Solutions Business.

Since 2022, Maria has held the role of

President for the USA & Canada business

of Royal Vopak, a global, independent

infrastructure provider. Maria sits on the

board of Vopak’s USA and Canadian joint

ventures, which include Vopak Industrial

Infrastructure Americas, Vopak Exolum

Houston, Vopak Energy Storage Texas,

Ridley Island Propane Export Terminal

and Ridley Island Energy Export Facility.

Maria holds a Bachelor of Science degree

in Chemical Engineering and a Master of

Business Administration – both from

The Ohio State University.

Board of Directors

continued

Committee

Chair

Audit

Committee

Nomination

Committee

Remuneration

Committee

Elementis plc

Annual Report and Accounts 2023

Division of responsibilities

Shareholders

CEO

The CEO is responsible for the day-to-day running of the business and overseeing

its performance, development and strategy.

Diversity,

Equality &

Inclusion

Council

Governance framework

Board of Directors

The Board is responsible for ensuring long term sustainability and the delivery of long term value and success

for our shareholders. It also provides effective challenge and support to the Executive Leadership Team (“ELT”)

in relation to strategy, while ensuring the Group maintains effective risk management and internal controls systems.

ELT

The ELT is led by the CEO and meets quarterly to review various reports from all

areas of the business as well as the external operating environment and associated risks and opportunities.

Relevant matters are reported to the Board by the CEO or the CFO.

Board Committees

The Board is supported in its activities by Board Committees that have specific delegated responsibilities,

as set out in separate terms of reference, which are available on the website: www.elementis.com

Audit Committee

Overseeing financial

reporting and the Group’s

financial systems

Providing oversight and

governance of internal

controls and risk

management

Monitoring the

independence and

effectiveness of the

external auditors

Maintaining an

appropriate relationship

with our internal and

external auditors

Nomination Committee

Responsibility for the

structure, size and

composition of the

Board, ensuring the

Board and Committees

have the correct balance

of skills, knowledge

and experience

Ensuring and overseeing

succession planning

and responsibility for

the annual review of

Board effectiveness

Identifying and nominating

suitable candidates for

appointment to the Board

Promoting diversity

Remuneration Committee

Setting the Remuneration

Policy and determining the

review structure for the

Chair, Executive Directors

and ELT, to align their

remuneration with the

long term interests of

the company

Approving bonus plan,

long term incentive plan

targets and share awards

Disclosure Committee

Advising the Board

regarding, and to ensure

that Elementis makes,

accurate and timely

disclosure of price

sensitive information that

is required to be disclosed

to meet its legal and

regulatory obligations

For further information,

please see pages 88-91.

For further information,

please see page 84-87.

For further information,

please see page 96-122.

Health, Safety and

Environmental

Council

Ethics &

Compliance

Council

Sustainability

Council

Data Protection

Steering

Committee

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Board and engagement highlights

Board meeting attendance

The attendance of the Directors at the Board meetings in the year ended 31 December 2023 is as follows:

Member Member since Eligible meetings (max 8) Attendance

John O’Higgins February 2020 8 8

Dorothee Deuring March 2017 8 8

Steve Good October 2014 8 8

Trudy Schoolenberg March 2022 8 8

Christine Soden November 2020 8 8

Clement Woon December 2022 8 8

Board changes

There were no changes to the Board

during the year. Steve Good reached

a tenure of nine years in October 2023.

In order to facilitate an orderly handover

of the Remuneration Committee Chair to

Clement Woon after the AGM, Steve

was re-appointed for a six month period

until the conclusion of the AGM. Further

information can be found on page 85.

In March 2024, Maria Ciliberti was

appointed to the Board and will stand

for election at the upcoming AGM.

Shareholder engagement

Investor meetings

The Board values the importance of

an active engagement programme and

we are continuously looking to improve

our engagements to build and develop

open and trusted relationships with

our shareholders.

The investor relations function has

primary responsibility for managing

day-to-day communications with

institutional shareholders and supports

the Chair, Senior Independent Director

(“SID”), CEO and CFO in conducting a

comprehensive shareholder engagement

programme during each financial year.

The CEO and CFO are the Company’s

principal spokespeople. Throughout the

year, they engaged extensively with

existing and prospective investors during

individual and group meetings, as well as

conferences and fireside discussions. In

2023, a total of 70 meetings were held with

investors, of which 14 were with the Chair.

The Chair conducted a governance

roadshow in April, meeting with the top

shareholders. Discussions focused on the

Group strategy, including the successful

disposal of Chromium and ways to improve

Talc performance. The Chair used this

opportunity to gain feedback on dividend

reinstatement and other governance

related matters. Later in the year,

the Chair initiated meetings with top

shareholders, asking for their feedback

following a letter published by Elementis’

largest shareholder. Feedback from the

meetings was shared with the Board.

In addition, the SID and other members

of the Board, for example, the Chairs of

the Audit, Nomination or Remuneration

Committees, are available to meet with

shareholders as appropriate.

The Board receives an investor relations

report at each of its meetings outlining

recent dialogue with investors and

feedback received, and updates from

our corporate brokers JP Morgan

and Numis. Analysts’ reports are

also made available to the Board.

Retail investors

The Board is keen to hear the views of

our private shareholders and they are

encouraged to use our shareholder mailbox,

company.secretariat@elementis.com.

The Company’s website is kept

updated with Company reports and

related information.

Enquiries may also be addressed to

the Group General Counsel & Company

Secretary and sent to the registered office.

Annual General Meeting

The Company held a hybrid AGM on

26 April 2023 which shareholders were

invited to attend in person or to view

the AGM proceedings via a webcasting

facility, with a telephone line available

for shareholders to ask questions.

The proceedings of the AGM are

available on demand. All resolutions

were approved by shareholders on a poll.

Shareholders were able to submit

questions ahead of the AGM, as well as

ask them during the AGM. One question

was submitted prior to the AGM and

answered during the meeting; there were

no questions raised during the meeting.

A recording of the AGM can be found on

our website.

The 2024 AGM will be held on

30 April 2024 at 10.00am as a hybrid

AGM and further information can be

found in the Notice of Meeting.

Read more about how we engage with,

and create value for our stakeholders

on pages 7-9 and 26-27.

Scheduled meetings

during the year

Business and financial performance

27.5%

Strategic

49%

Governance, risk and compliance

23.5%

The allocation of agenda time for

the eight scheduled meetings

was categorised into: Business and

financial performance; strategic; and

governance, risk and compliance.

Elementis plc

Annual Report and Accounts 2023

Board in action

Board meetings

The Board has a formal annual programme

of activities which is supplemented by

ad-hoc meetings and conference calls,

when appropriate.

At each of its formal meetings, the Board

receives standing reports on business

performance, operations (including HSE

performance), sustainability, innovation,

IT investor engagement, governance

and compliance.

During 2023, the Board considered

a number of topics:

2023-2028 financial shape

Five-year strategy

Annual Operating Plan

Capital Markets Day

Environmental, social and governance

(“ESG”) and Sustainability

Ethics & Compliance

HSE and Global process safety review

Innovation

IT and Cyber Security

Legal matters (including litigation)

People related topics including:

Fit for the Future (organisational

restructure); strategy; diversity,

equity and inclusion (“DE&I”);

people engagement; employee

value proposition; and succession

Performance Specialties

Personal Care

Procurement

The Elementis Group Pension Scheme

The Board regularly invites ELT members

to Board meetings to report on their

relevant business and functional areas.

The Non-Executive Directors make

themselves available for discussion

with ELT members in advance of Board

meetings where a particularly strategic

subject is tabled, to enable an in-depth

exploration of the subject matter in

preparation for the meeting.

Time is set aside at the end of each

meeting for a nominated Director to

provide constructive feedback on the

proceedings, including the quality and

usefulness of the materials presented.

It is customary for the Board, or the

Non-Executive Directors and the Chair,

to meet the evening before in-person

to allow them to discuss relevant

matters in a less formal setting.

Key activities during the year

2023

Nov

Jan

Sep

June/

Sep

Capital Markets Day

We held a Capital Markets

Day for analysts and investors

in London and via webcast,

which was attended by

representatives from over

half of our institutional investors.

During the event, we communicated

our 2026 targets, to be delivered

through our seven growth platforms

and two efficiency programmes,

as well as highlighting how we

are living our purpose of “unique

chemistry, sustainable solutions”

through our sustainability strategy.

Guests were able to watch live

demonstrations showcasing

recent innovations developed

to address global trends,

and a sustainability update.

Fit for the Future

Following the sale of the Chromium

business, the Board felt it was the

right time to focus on creating an

organisational design that would

make the Company more financially

and operationally resilient, and

“fit for the future”. The proposed

changes were announced

in September, with the new

organisational structure to be

in place by the end of 2024.

Consolidation of

business segments

We consolidated our Talc and

Coatings business segments

into a new segment, Performance

Specialties. The integration of the

product portfolio and strong market

focus allowed us to further leverage

synergies between these two

business segments.

Completion of Chromium

business divestment

The sale of the Chromium business

completed on 31 January 2023,

and finance, IT, sales and HR

transitional services were

provided post-completion.

Response to open letter

from major shareholder

An open letter to the Board

was published by one of our

shareholders requesting that the

Board initiate an immediate sale

process in respect of the Company.

The Board regularly considers the

Company’s strategic alternatives

with its financial advisors, and

reviewed the shareholder’s letter

carefully, concluding that initiating

an immediate sale process would

not be in the best interests of its

shareholders, given the substantial

value still to be realised through

the execution of its strategy.

A copy of the response can

be found on our website.

Site visits to China,

Taiwan and UK

With its people as its core asset, the

Board recognises the importance of

ongoing face to face engagement

with the workforce on all levels.

Site visits to Songjiang (China),

Livingston (UK) and Hsinchu

(Taiwan) during 2023 enabled

to the Board to gain insights

from discussions with the

local management teams and

colleagues about the opportunities

and challenges they face, in

management presentations as well

as less formal networking events.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Workforce engagement

Livingston, UK

The Board visited our Livingston plant,

where organoclay is processed for the

Performance Specialties and Personal

Care business segments. Members of the

management team gave presentations

on the plant’s activities, followed by

a tour of the manufacturing site and

laboratory, which included presentations

by colleagues on specific activities

undertaken at the site. A Board meeting

was also held at the Livingston plant.

The Board continued the discussions

with management over dinner.

June

Engaged activities throughout the year

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Board meeting

Board site visit

DNED engagement with employees

Employee survey

Speak Up survey

Global townhall

Board visits

The Non-Executive Directors visit at least

two of the Company’s manufacturing sites

each year, to gain insights into the Group’s

activities and to meet and engage with

colleagues across the business. This

enables the Directors to maximise their

contribution to Board discussions and

their understanding of stakeholders.

South Plant

Taiwan and China

Day 1 – Hsinchu, Taiwan

The Board visited our two plants in

Hsinchu and received an overview of

the plants’ activities from management,

with an opportunity for Q&A, before a full

site tour of both the North Plant and the

South Plant. After the tour, a Board

meeting was held at the North Plant.

The Board engaged with employees

from a range of functions over dinner

in the evening.

Sept

North Plant

Day 2 – Songjiang, China

Having last visited the Songjiang site

in 2019, the Board was keen to hear

the local team’s perspectives on

how the marketplace had evolved

in the intervening period.

The Songjiang management team

provided the Board with an overview

of the plant’s activities, including resilience

during COVID-19 and innovative plans

for the future, as well as commercial

opportunities in the region, before

undertaking a site tour.

This was followed by a lunch with the

management team, during which

employees had the opportunity to

engage directly with the Board.

Elementis plc

Annual Report and Accounts 2023

All

year

Engaged activities

throughout the year

In line with the requirements of the

UK Corporate Governance Code, the

Board considered the mechanisms for

ensuring that the views and concerns

of the workforce are taken into account

and agreed that a specific Board

accountability for workforce engagement

would be formalised by appointing

a Board member to serve as the

Designated Non-Executive Director

for workforce engagement (“DNED”).

Christine Soden currently serves as

the DNED, having assumed the role on

appointment as a Board member on

1 November 2020.

DNED engagement

While visiting the various sites during

the year, Christine Soden, as DNED,

held a number of focus groups which

gave her an opportunity to meet with

a selection of employees and encourage

them to share their views and raise any

issues or concerns.

Christine then ensures that employees’

questions and concerns are heard during

Board discussions, that appropriate

steps are taken to evaluate the impact

of proposals and developments on the

workforce, and that the Board considers

what steps should be taken to mitigate

any adverse impact.

Values and

culture

Communications

Processes

Remuneration

and benefits

Examples of

workforce

engagement

themes

Local/global

ways of

working

Non-Executive

Director for workforce

engagement

Christine Soden

Learnings and responses

Themes identified from the focus group

sessions during the year included:

Importance of keeping a focus on

communication with employees on

Fit for the Future, which has been

reflected in the communication

plans at global and local levels

The Company’s approach to

remuneration was generally well

understood and satisfactory to

employees, although clarity was

sought as to how pay parity is

maintained between long serving

and new employees. Data examined

from recent hires showed that

there was parity and that current

processes work

The introduction of the Company-

wide engagement survey had been

well received and had provided

actionable insights to teams

Although access to IT systems was

good, further training on using the

Company’s different IT platforms

would be useful in some cases.

The Company is reviewing its use

of different platforms as part of the

evolution of the IT function under

the Fit for the Future programme

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Purpose, culture and values

Our purpose

Our purpose is Unique Chemistry,

Sustainable Solutions.

We are collaborative industrial innovators,

developing long term partnerships with

our customers, innovating at pace to

keep them at the forefront of their markets.

Combining our access to unique

natural resources with our unmatched

rheology and technological expertise,

we responsibly transform raw materials

into advantaged ingredients that provide

crucial end product benefits. This enables

our customers to solve their product

performance and sustainability challenges.

Our culture

The Board is satisfied that the Company’s

culture continues to be aligned with its

purpose, values and strategy:

Strategy is discussed regularly and

includes the three-year plan and

annual operating plan, and is formally

agreed as part of the Board’s

annual programme

The Company’s Values underpin

the behaviours expected to cultivate

an open and inclusive culture

Further information on Elementis culture

can be found on pages 45-50.

Cultural identifier

Cultural indicators

Promoting integrity

and accountability

Valuing

diversity

Being responsive

to the view of

stakeholders

Culture aligned

to purpose

and Values

Culture aligned

to strategy

Employee engagement

survey insight

Employee retention,

promotion and attrition data

Reports on progress on

diversity, equity and inclusion

Whistleblowing reports

HSE performance

Internal Audit reports

and findings

Ethics & Compliance

programme

How the Board monitors culture

Our values

Our values are core to our high-performance culture and are reflected in everything that we do.

Our way

of life

Creating value

for our customers

Passion for

excellence

We do the

right thing

The power of

collaboration

Further information regarding our values can be found on page 6.

Safety Solutions Ambition Respect Team

Elementis plc

Annual Report and Accounts 2023

Board evaluation

The Board undertakes a rigorous

evaluation of its effectiveness and that of

its Committees and individual Directors

annually. The results of the evaluation

enable the Board to reflect on the

continuing effectiveness of its activities

and quality of decisions, and to identify any

areas for further focus in the coming year.

At least every three years, an externally

facilitated evaluation of Board effectiveness

is carried out. The last externally facilitated

evaluation was carried out in 2021, with

the next scheduled to take place in 2024.

In 2023, the Board undertook an

internal evaluation of its performance.

Board members completed a detailed

questionnaire compiled by the General

Counsel & Company Secretary and

approved by the Chair. The questionnaire

focused on:

How the Board had managed

opportunities and challenges

during the year

Board dynamics, Chair/Committee

Chair and individual Board

member performance

The operation and effectiveness

of the Board and its Committees

Priorities for 2024

In addition, employees who presented to

the Board during the year were given the

opportunity to provide feedback on their

experience anonymously.

Suggested topics for this feedback

were whether they felt welcomed by

the Board, that the Board listened and

was actively engaged in the discussion,

and asked relevant, thoughtful and

challenging questions.

Evaluation findings

and recommendations

The responses of Board members to

the questionnaire were largely positive

in relation to the continued effective

operation of the Board and its Committees.

The Board’s relationship with management

was seen as constructively challenging

and characterised by a high degree of

trust and respect. The Board was felt to

have received robust and comprehensive

reporting from management in relation

to key areas such as strategic priorities,

talent and succession, sustainability

and financial resilience.

The wider employee feedback was largely

favourable, and highlighted that the Board

was felt to listen carefully and to ask

challenging, but constructive, questions.

The Board was considered approachable

and engaged, inside and outside of formal

Board meetings.

The agreed focus areas for 2024

include maintaining oversight over the

implementation of the Fit for the Future

programme, maintaining the strong focus

on strategy and the growth agenda,

and ensuring that sustainability continues

to be seen as a differentiator.

With regard to the actions and focus

areas agreed as a result of the 2022

Board evaluation, it was generally felt

by Board members that these had

progressed well, particularly in relation

to the continued focus on the execution

of the Chromium divestiture (which had

completed in Q1 2023) and on strategy

(as demonstrated during the Capital

Markets Day held in Q4 2023).

Process for the year

2023

Dec

Jul

Sep

Oct

Aug

The SID led a performance evaluation of the

Chair with the other Board members

The Group General Counsel & Company Secretary

discussed the key themes of the evaluation with the

Chair and prepared a formal paper for discussion

The Chair met with each Director individually

to provide a forum for sharing any more

detailed or specific feedback

The Group General Counsel & Company Secretary and

Board Chair agreed the timetable and process of the

internal evaluation, and the content of the questionnaire

The Board discussed the key findings and agreed

on focus areas for 2024

The questionnaire was sent to Directors for completion

Anonymous feedback was solicited from employees

who had interacted with the Board during the year

The individual responses were collated into a report

summarising key themes by the Group General

Counsel & Company Secretary

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Nomination Committee report

Highlight areas of focus

Ongoing Board

succession planning

Executive progression

Oversight of Group’s

Diversity Policy

Board effectiveness review

Dear Shareholders,

As Chair of the Nomination Committee (the ‘Committee’), I am

pleased to present the Nomination Committee report covering

the work of the Committee during 2023. This report should be

read in conjunction with the separate section on compliance

under the UK Corporate Governance Code on page 92.

Role of the committee

The Committee is responsible for the structure and composition

of the Board and ensuring that the Board and Committees have

an appropriate balance of skills, knowledge and experience to

support the strategy of the Company now and in the future.

Key responsibilities

Regularly reviewing the structure and composition of the Board

Ensuring the right leadership, balance of skills and experience

to deliver the Company’s strategy and enable the Board to

fulfil its obligations effectively

Succession planning for the Board and ELT

Leading on the annual performance evaluation of the Board

and its Committees

Identifying and managing any potential conflicts of interests

The Committee’s terms of reference, which are reviewed and

approved annually, are available at www.elementis.com.

Programme of business

Annual review of Directors’ independence and conflicts

in accordance with the Committee’s terms of reference

Reviewing structure, size, diversity and composition of

the Board

Succession planning for the Board, ELT leadership

development, and oversight of senior management

succession plans

Ensuring that at least annually the Non-Executive

Directors meet without the Executive Directors present

Annual evaluation of the Board Chair, led by the SID

Approval of Nomination Committee report for inclusion

in the Annual Report

John O’Higgins

Chair, Nomination Committee

Attendance at Nomination Committee meetings

Member Member since

Eligible meetings

(max 6

) Attendance

John O’Higgins February 2020 6 6

Dorothee Deuring March 2017 6 6

Steve Good October 2014 6 6

Trudy Schoolenberg March 2022 6 6

Christine Soden November 2020 6 6

Clement Woon December 2022 6 6

The CEO and CFO were invited to attend where appropriate.

1 Four meetings were scheduled, and two were ad hoc.

Elementis plc

Annual Report and Accounts 2023

Board effectiveness processes

Annually, the Board is responsible for conducting an evaluation

of the performance of the Board and its Committees.

The Committee oversees the effectiveness of the process,

which for 2023 comprised an internal evaluation by way of

comprehensive questionnaire covering the effective performance

of the Board and the functioning of the Committees. The last

externally facilitated evaluation was carried out in 2021 and

the next external review will be conducted in 2024. Following

the evaluation, the Board is satisfied of the continued effective

operation of the Board and its Committees. Further information

regarding the process can be found on page 83.

Directors’ conflicts

The Committee has oversight of Directors’ potential

conflicts of interest and, during the year, in accordance with

policy, considered and approved the following additional

external appointments:

Steve Good as non-executive director and non-executive board

chair of Norcros plc

Dorothee Deuring as non-executive director of PolyPeptide

Group AG and as non-executive director of Temenos AG

Board composition and skills

A matrix is maintained which serves as a record of Directors’

experience, attributes and expertise. The Committee reviews

this matrix annually to ensure that the Board has an appropriate

composition and range of skills, experience and diversity

to prevent any dominance, either individually or collectively,

over the Board’s decision making processes. Highlights from

this matrix are noted on page 87.

Re-appointments to the Board and

succession planning

The re-appointments of Christine Soden (for a second three

year term from November 2023) and Steve Good (for a six month

period at the end of his nine year tenure in October 2023, primarily

in order to facilitate an orderly handover to Clement Woon, as

Remuneration Committee Chair, in early 2024) were considered

and approved by the Committee, and recommended to the

Board during the year. The recommendations were supported by

considerations regarding the Directors’ independence, experience

and contribution made to the Board and its Committees. The

Committee considered that Steve would continue to demonstrate

independence in character and judgement despite having served

nine years on the Board as of October 2023, and that the Board

would benefit from his extensive knowledge of the Company

and experience for the additional six month period.

These matters were subsequently confirmed following the Board

evaluation process and a review of conflicts and independence.

The Board followed the Nomination Committee’s recommendation

to appoint Clement Woon as Remuneration Committee Chair

with effect from the conclusion of the AGM. In addition to having

served 16 months as a member of the Remuneration Committee,

Clement has served as a member of the remuneration committee

of Morgan Advanced Materials plc since May 2019.

The Chair of the Board, assisted by the Nomination Committee

members, led the search process for a new Non-Executive

Director during the year. A role specification was considered

and approved by the Committee, with input from the Executive

Directors and Korn Ferry, which was awarded the mandate by the

Committee to search for the Board’s next three members in 2021.

(Korn Ferry was appointed as an advisor by the Remuneration

Committee following a competitive tender process in 2017, but

otherwise has no connection with the Company or with any

individual Director. The services provided by Korn Ferry to the

Remuneration Committee were carried out by a separate team to

the human capital related services. Further information regarding

the role of Korn Ferry in advising the Remuneration Committee

can be found on page 121).

The Committee agreed that the Non-Executive Director

candidates should:

be current, proven and well-regarded executives from the

broad industrial/manufacturing sector

exhibit significant international business experience in their

executive careers as either a CEO, or main board executive,

of a complex multinational B2B company

be strategic thinkers, able to play a role in Board discussions

on Elementis’ strategy

Korn Ferry prepared a long list comprising candidates from the

widest talent pool, against the above objective criteria and with

regard for the benefits of diversity, including gender and ethnicity.

The Committee duly discussed the merits of each candidate

and agreed a shortlist to be interviewed by Board members.

Committee meetings were held to discuss feedback. Following

the interviews and taking of references for the preferred candidate,

external responsibilities and potential conflicts, the Committee

agreed to recommend to the Board that Maria Ciliberti be

appointed as Non-Executive Director, with effect from

11 March 2024. Please see page 76 for Maria’s biography.

In light of the Board’s programme of activity, the Nomination

Committee is evaluating further strengthening the depth and

expertise of the Board through the appointment of an additional

Non-Executive Director during 2024.

Re-election of Directors

The Board has concluded, following the appraisal process, that

each of the Directors standing for (re-)election continued to make

an effective contribution to the Board and committed sufficient

time to the Board and Committee meetings and any other duties.

With the exception of Steve Good, who will step down from

the Board at the conclusion of the AGM in April 2024 having

completed a nine and a half year tenure, all Directors will stand

for (re-)election at the 2024 AGM, and an explanation of how

they contribute to the success of the Company can be found in

the Notice of Meeting.

Diversity Policy

The Board has adopted a Diversity Policy, which is available on the

Company’s website. The Board acknowledges the importance of

diversity in its broadest sense in the boardroom as a key element

of Board effectiveness. Diversity includes perspective, experience

(including working internationally), background (including

nationality), cognitive and personal strengths and other personal

attributes, as well as diversity of gender, social background and

ethnicity. We consider overall Board balance when appointing

new Board members.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Progress on our diversity objectives

Our external advisers are selected on their commitment and

ability to deliver diverse long-lists in the recruitment processes

The composition of the Board is reviewed on an annual basis,

with an assessment of skills, expertise, backgrounds and

experience prior to Directors joining the Board and on an

ongoing basis using a diversity matrix

The proportion of female Directors on the Board as at

31 December 2023 was 37.5% (three women and five men).

After the conclusion of the 2024 AGM, the gender balance of

the Board is expected to be 50:50 (four women and four men).

The Board is aware of the target specified in recent updates

to the Listing Rules for female representation on Boards of at

least 40% and will ensure that the benefits of diversity are

appropriately considered in the context of any future Board

recruitment. The Board currently meets the targets referred

to in the new Listing Rules for there to be at least one woman

in a senior Board role (the role of Senior Independent Director

being held by Dr Trudy Schoolenberg) and at least one member

of the Board from a minority ethnic background (following the

appointment of Clement Woon, a Singaporean national, to the

Board in December 2022)

Oversight of gender and ethnic diversity profile across the

Group including promotion of talent into management roles

(see page 48 for progress on female leadership)

We note the new Parker Review target to set a percentage

goal for senior management positions that will be occupied by

ethnic minority individuals, to be achieved by December 2027,

and have started a process to identify how best to approach

this in order to set a meaningful target which will take into

account our global presence. We expect to be in a position

to set our target during 2024

Oversight of executive and senior management succession

Continuing to monitor regulatory developments and best

practice in respect of diversity

Our gender identity and ethnicity data in accordance with Listing

Rule 9.8.6R(10) is set out below as at 31 December 2023. To

compile this data, at year end, Board and ELT members were

asked to complete a diversity disclosure to confirm which of the

categories contained in the tables below that they identify with.

Gender representation among Board and Executive Management as at 31 December 2023

Number of

Board members

Percentage

of Board

Number of

Senior Positions

on Board

Number in

Executive

Management

Percentage of

Executive

Management

Male 5 62.5% 3 8 88.9%

Female 3 37.5% 1 1 11.1%

Not specified/

prefer not to say – – – – –

Ethnicity representation among Board and Executive Management as at 31 December 2023

Number of

Board members

Percentage

of Board

Number of

Senior Positions

on Board

Number in

Executive

Management

Percentage of

Executive

Management

White British or other

White (including minority

white groups) 5 62.5% 4 8 88.9%

Mixed/multiple ethnic groups 0 0% 0 0 0%

Asian/Asian British 1 12.5% 0 0 0%

Black/African/Caribbean/

Black British 0 0% 0 1 11.1%

Other ethnic group,

including Arab 0 0% 0 0 0%

Not specified/prefer

not to say 2 25% – – –

1 CEO, CFO, SID, Chair.

Priorities for the year ahead

Review Board and senior management succession plans

Review Board Diversity Policy and objectives

Review management progress towards achieving

diversity objectives

Review of 2024 external evaluation outcomes and

planning for 2025 internal evaluation

John O’Higgins

Chair, Nomination Committee

Nomination Committee report

continued

Elementis plc

Annual Report and Accounts 2023

Diversity

Board expertise and experience matrix

John

O’Higgins

Paul

Waterman

Ralph

Hewins

Dorothee

Deuring

Steve

Good

Christine

Soden

Trudy

Schoolenberg

Clement

Woon

Manufacturing/industrial processing

Specialty chemicals

International business and markets

Pension trustee

M&A/capital raising

Financial/accounting/risk expertise (recent/relevant)

Sales/marketing/customer

Strategy/business development

Research/technology/innovation/product dev

Risk management

HR/people

Sustainability/climate

Digital/e-commerce/cyber

12.5%

62.5%

25%

Composition of the Board

Independent

Non-Executive Directors

Executive Directors

Chair

62.5%

37.5%

Gender of the Board

Female

Male

88.9%

11.1%

Gender of ELT

Female

Male

63%

37%

Gender balance of ELT and direct reports

Female

Male

939

341

73.4%

26.6%

Gender Company-wide

Female

Male

1 Senior Independent Director is female.

Note: As at 31 December 2023

33.3%

Length of tenure

3-6 years

Less than 3 years

6-9 years

12.5%

37.5%

12.5%

Nationality of the Board

Austrian

British

Dutch

Irish

Singaporean

American

50%

Age

50-60

60+

Under 50

87.5%

12.5%

Board ethnicity

Asian/Asian British

White British or

other white

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Audit Committee report

Highlight areas of focus

Recommended approval of the

2022 Annual Report and Accounts

and 2023 Half Year Interim

Statements to the Board

Approval of audit plans

(external and internal) for 2023

Review of going concern

and viability statement

Presentation of adjusting items

Goodwill and indefinite life

intangible assets impairment review

Dear Shareholders,

As Chair of the Audit Committee (the ‘Committee’), I am pleased

to present the Audit Committee report covering the work of

the Committee during 2023. This report should be read in

conjunction with the separate section on compliance under

the UK Corporate Governance Code on page 92.

Role of the committee

To assist the Board by establishing, reviewing and monitoring

the Group’s financial reporting, internal controls framework

and risk management, internal audit programmes and changes

in regulatory requirements.

Composition of the committee and

meetings attendance

In accordance with the Code, the Board has confirmed that all

members of the Committee are independent Non-Executive

Directors and have been appointed to the Committee based

on their individual financial and commercial experience.

The Board is satisfied that Christine Soden, as Chair of the

Committee, has recent and relevant financial experience to chair

this Committee through her previous executive roles as CFO at

Acacia Pharma Group plc (2015-2020) and CFO of Electrical

Geodesics, Inc. Christine is a chartered accountant (FCA).

The Committee, as a whole, has financial and commercial

competence relevant to the sector in which the Group operates.

Further information on the skills, expertise and experience of

Committee members can be found on page 87.

The Chair of the Board, CEO, CFO and Group Financial Controller

& Head of Tax, and representatives from the external auditors

(Deloitte) and internal auditors (PwC), have a standing invitation

to attend Committee meetings. All Board members have access

to Committee papers.

Key responsibilities

Monitoring the integrity of the Group’s financial statements,

financial reporting and related statements

Ensuring the appropriateness of accounting policies,

any changes to these, and any significant estimates and

judgements made

Reviewing the effectiveness of internal control,

compliance and risk management systems

(including whistleblowing arrangements)

Overseeing all aspects of the relationship with the internal and

external auditors; approving the policy on non-audit services;

making recommendations to the Board for their dismissal or

changes; and supervising any tender process

The Committee’s terms of reference, which are reviewed and

approved annually, are available at www.elementis.com.

Christine Soden

Chair, Audit Committee

Attendance at Audit

Committee meetings

Member Member since

Eligible meetings

(max 3) Attendance

Christine Soden (Chair) November 2020 3 3

Dorothee Deuring March 2017 3 3

Trudy Schoolenberg March 2022 3 3

Clement Woon December 2022 3 3

Elementis plc

Annual Report and Accounts 2023

Activities during the year

The Committee’s focus in 2023 has been on:

Meetings with both the internal and external auditors to review

their key findings

Reviewing the internal control systems and considering the

output of internal audit reviews and management’s action plans

Reviewing the integrity, consistency and key accounting

judgements made by management in both the Company’s

full and half year results

Advising the Board on whether the Annual Report and

Accounts preparation process is fair, balanced and

understandable, and provides the information necessary to

shareholders to assess the Group’s position and performance,

business model and strategy

Reviewing the going concern and viability statements and the

supporting assumptions and assessments in the Company’s

half year report and Annual Report and Accounts

Ensuring compliance with applicable accounting standards,

monitoring developments in accounting regulations which

affect the Group and reviewing appropriateness of accounting

policies and practices currently in place

Reviewing effectiveness of the internal and external auditors,

their independence and objectivity and terms and scope of

engagement, and recommending their re-appointment

Overseeing matters relating to tax including the impact of

tax rates on the financial statements, the position on EU state

aid and approval of the Company’s tax strategy

Litigation and compliance reports for both the full and half year

Considering the material legal risks impacting the Company

and the associated provisioning for both the full and half year

Receiving updates on the Code of Conduct and Ethics and

the associated training and whistleblowing reports

Technical updates on the Annual Report and Accounts

key developments, 2023 year end report environment,

corporate governance matters and future developments

Reviewing the Group’s risk management activities undertaken

by each business area, and at Group level to identify and

assess the Group’s principal and key operational risks

Monitoring and assessing the Group’s insurance arrangements

Preparation, and reviewing progress, for CFD and TCFD

disclosure requirements

Identifying, assessing and mitigating climate related risks

Monitoring proposed Audit and Corporate Governance reforms

and the Group’s preparedness for these

Committee effectiveness

The Committee’s performance and effectiveness was reviewed in

the year as part of the Board and Committee effectiveness review

conducted by the Group General Counsel & Company Secretary

on behalf of the Chair of the Board. Further details can be found

on page 83.

External auditors

Deloitte has served as external auditors for seven years.

The Committee engaged with Deloitte to ensure this key area

of oversight was appropriately maintained. The Committee

periodically meets privately with the lead audit partner and senior

members of the audit team to discuss their work and findings.

Audit of the 2023 Annual Report

and Accounts

At the end of 2023, Deloitte presented its audit plan for the year

ahead, which the Committee considered and approved. Deloitte

highlighted the key areas of risk, which were primarily identified

as areas of judgement and complexity, and were consistent with

the areas identified by the Committee.

As part of the audit process, Deloitte prepared a detailed

report of its audit findings, which was reviewed and discussed

by the Committee. A similar process was undertaken for the

half year results.

Audit effectiveness

To support the Committee in evaluating the effectiveness of the

external auditors, a questionnaire-based evaluation is circulated to

internal stakeholders who have had the most interaction with the

external auditors during the audit process. The data is collated

into a score card which is used to assess the strengths and any

weaknesses of the external auditors.

Management and the external auditors then address any areas

of weakness in their regular review meetings and the lead audit

partner from Deloitte updates the Committee on how areas of

weakness are being addressed.

The Committee also monitors audit effectiveness by reviewing

the Audit Quality Inspection reports published by the FRC.

The Committee will formally assess Deloitte’s performance in

relation to the 2023 audit following its completion. It is intended

that a resolution to re-appoint Deloitte as the external auditors

is proposed at the 2024 AGM.

Audit independence and objectivity

The Committee considers the external auditors’ objectivity and

independence at least twice a year. It takes into account the

information and assurances provided by the auditor confirming

that all its partners and staff involved with the audit are

independent of any links to Elementis. The Committee also

monitors changes in legislation related to auditor independence

and objectivity to assist the Company to remain compliant.

Deloitte has confirmed that all its partners and staff complied

with their ethics and independence policies and procedures

which are fully consistent with the FRC’s Ethical Standard,

including that none of its employees working on the Company’s

audit hold any shares in Elementis plc.

Deloitte is required to provide written disclosure at the planning

stage of the audit in the form of an independence confirmation

letter. Their letter discloses matters relating to its independence

and objectivity, including any relationships that may reasonably be

thought to have an impact on its independence and the integrity

and objectivity of the audit engagement partner and the audit staff.

The audit engagement partner must change every five years and

other senior audit staff rotate at regular intervals.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

The Committee develops and recommends to the Board the

Company’s policy on non-audit services and associated fees that

are paid to Deloitte. In accordance with the FRC’s Revised Ethical

Standard, an auditor is only permitted to provide certain non-audit

services to public interest entities (e.g. Elementis plc) that are

closely linked to the audit itself or that are required by law or

regulation, as such services could impede their independence.

Permitted non-audit services fees paid to the statutory auditor are

subject to a fee cap of no more than 70% of the average annual

statutory audit fee for the three consecutive financial periods

preceding the financial period in which the cap applies. The 70%

non-audit services fee cap has been applied to the Group for

the year ended 31 December 2023. The average of audit fees is

$2.3m (calculated as the average of the audit fees for the three

preceding financial years (2022: $2.4m; 2021: $2.2m; 2020: $2.2m).

Non-audit services fees during the year were $0.0m, (2022:

$0.0m; 2021: $0.0m; 2020: $0.1m;) so significantly below the cap

of $1.6m (70% of $2.3m). In 2023, fees for non-audit services

represent 0% of the average audit fees on which the cap is based.

The Committee is of the view that Deloitte was objective and

independent throughout the 2023 audit process.

Auditor rotation and tendering, and

competition and markets authority

order – statement of compliance

The Committee carried out an audit tender process in 2015,

resulting in the appointment of Deloitte as external auditors in

April 2016. Deloitte’s re-appointment in 2023 was approved

by shareholders at the Company’s AGM in April 2023.

Under the Companies Act 2006, the lead audit partner must

be mandatorily replaced after five years to ensure auditor

independence. The external auditors, as a whole, can only

be appointed for a maximum term of ten years before

a competitive tender is required to be undertaken.

The year ended 31 December 2023 is the third year for the lead

audit partner, Lee Welham, who was appointed in January 2022.

Following this rotation of the lead external audit partner in FY2021,

the Committee considers a full tender for the Group’s external

audit services, subject to its annual reviews, be undertaken as

per the indicative tendering timeline below.

The Committee confirms that the Company is compliant with the

provisions of the Statutory Audit Services for Large Companies

market investigation (mandatory use of Competitive Tender

processes and Audit Committee Responsibilities) Order 2014,

for the year ended 31 December 2023.

External audit – indicative

tendering timeline

2016: Deloitte appointed as external auditors

2021: Mandatory appointment of new audit partner

2025: Full competitive tender to be undertaken

2026: Re-appointment of, or appointment of new,

external auditors

Non-audit services

The Group has an agreed policy with regard to the provision

of audit and non-audit services by the external auditors,

which has operated throughout 2023 and is available on

the Company’s website.

Under the policy, the CFO may approve individual engagements

where the fee is up to 15% of the Group’s audit fee for the year,

provided that the non-audit fees in the year do not exceed 50%

of that Group audit fee. Decisions above these thresholds must

be referred to the Committee for determination.

2023 2022

Audit fees ($m) 2.1 2.4

Assurance related services ($m) 0.3 0.3

Non-audit fees ($m) – –

Ratio of non-audit fees to

audit fees (%) 0% 0%

Total fees ($m) 2.4 2.7

Key Judgements

Key judgements How the Committee has addressed these matters

Adjusting

Items

The presentation and consistency of costs and

income within adjusting items is a key determinant

in the assessment of the quality of the Group’s

adjusted earnings. Adjusting items was a particularly

important area of judgement during the current year

due to the announcement of the fit for the future

restructuring programme. The restructuring gives

rise to an IAS 37 provision, with the expense of

$25.4m being included as an adjusting item as part

of business transformation costs. The Committee

carefully reviewed the appropriateness of

classification of the costs as adjusting items,

as well as the accuracy of the costs.

Revenue

recognition

The main area of judgement continues to be in

relation to recognition of revenue from shipments

by sea. The Committee satisfied itself that the

Group had appropriately recognised revenues

in accordance with their contractual obligations

during the period, paying particular attention to

period end cut-off.

Internal controls, risk and risk management

The Committee’s role is to review the effectiveness of the internal

control, compliance and risk management systems, which it

carries out in support of the Board’s formal review of significant

risks and material controls, as summarised in the Risk

management report on pages 63-66.

The Committee also has oversight of associated readiness activity

and implementation timelines, and allocates appropriate resources

to continue the development of our framework of controls in line

with guidance.

PwC provides an outsourced internal audit function. The

Committee considers that the value of internal audit is enhanced

by having a third party perform this function, to support the

independent challenge of management and give greater access

to expertise and resources than an internal function could provide.

The internal audit plan is based on a review of the Group’s key

risks which are considered high risk, or have not been subject

to a recent audit. The 2023 internal audit plan was discussed

and agreed between management and PwC ahead of it being

considered and subsequently approved by the Committee.

Management review the schedule with PwC on a quarterly basis

and adapt the schedule during the year to incorporate any new

or increased risks. The outcomes of these reports are provided

to the Committee, alongside any management actions.

Audit Committee report

continued

Elementis plc

Annual Report and Accounts 2023

Following an evaluation of the services provided by PwC in respect

of the internal audit, the Committee confirms that both the process

for determining the internal audit programme, and the programme

itself, are appropriate and effective.

Management are committed to address all control findings

identified by both the internal and external auditors. The Group

has continued to remediate control deficiencies as they are

identified. The Group also continues to invest in its finance,

operational and IT capabilities, and management are committed

to maintaining a strong control environment. Set out below is

a summary of the key features of the Group’s internal controls

and risk management system.

Control environment

The Group has policies and procedures that set out the

responsibilities of business and site management, including

authority levels, reporting disciplines, and responsibility for

risk management and internal controls. In addition, annual

compliance statements on internal controls are certified by

each operating segment.

Risk identification and review

A formal risk review process exists at Board and ELT levels for the

identification, evaluation, mitigation and ongoing monitoring of risks,

including emerging risks. Further details can be found on pages 67-71.

Internal audit programme

An internal audit programme is proposed by PwC in consultation

with the CFO and approved by the Committee each year, setting

out a programme of audits over the course of the next 12 months.

The programme covers the monitoring of the effectiveness

of internal controls and the design of processes to test the

effectiveness of controls. As well as conducting audits of operating

facilities, sales offices and tolling sites on a two to three year

rotational basis, the internal audit programme includes reviews

of Group functions and processes.

During 2023, the following audits were undertaken:

ESG review (phase 2)

Brazil review

Supplier Assurance review

Forecasting, planning and budgeting review

Internal auditor effectiveness

To support the Committee in evaluating the effectiveness of the

internal audit programme, a questionnaire-based evaluation is

completed by employees who have had the most interaction with

PwC during the year. A scorecard is reviewed by the Committee

to assess the strengths and weaknesses of the internal auditors.

The effectiveness of the internal audit function was considered

and confirmed by the Committee.

Controls assurance

The controls assurance framework at Elementis is as follows:

Board leadership supported by an open and transparent

culture of ‘no surprises’, good governance and compliance.

This means knowing and understanding the businesses

and quality interactions between the Board and the ELT

(including a regular programme of presentations and reports

to the Board, as well as operational site visits)

Internal and external audit programmes, and regular litigation

and compliance reviews with the Group General Counsel

& Company Secretary

A programme of compliance audits, regulatory inspections,

environmental reviews and property surveys by external specialists

The Company’s Code of Conduct and Ethics, on which

all employees receive training, and which summarises the

Company’s key policies, including anti-bribery and corruption,

whistleblowing arrangements and anti-retaliation. In 2023, we

launched our “Business Partner Expectations Document” which

sets out our key requirements of third parties that we do business

with, as well as our third party compliance risk screening tool

Whistleblowing

If an individual is not comfortable speaking up to their line

manager, to HR or to the Compliance team regarding potential

breaches of law, Company policy or values (including those

related to accounting, auditing, risk, internal control and related

matters), they have access to an independently hosted,

anonymous (if preferred) whistleblowing facility (IntegrityCounts),

available 24 hours a day, 365 days of the year. Details of how

to access this service are referenced in the Code of Conduct

and Ethics, and actively advertised at all Elementis locations.

Information is also available online. The Committee has oversight

of reports of this nature, which are investigated by the Group

General Counsel & Company Secretary with the involvement

of other senior colleagues as required. During 2023, there were

17 reports. As a result of the Committee’s review, it was satisfied

that all had been duly investigated and appropriate actions

identified by management.

Fair, balanced and understandable

The Committee adopted a similar approach as in previous years

to ensure that the Annual Report is fair, balanced and

understandable. The process was as follows:

An internal Annual Report team was set up to manage the

process. The team consisted of members drawn from Group

Finance, Company Secretariat, Investor Relations, Sustainability

and Communication teams. The team was responsible for

regularly reviewing work and ensuring balanced reporting with

appropriate links between key messages and sections of the

Annual Report

The Committee Chair held meetings with the audit partner,

and the Committee held meetings with the external auditors

without management being present

An audit clearance meeting was held with the Committee Chair,

CFO and members of the Finance team alongside the audit

partner and audit team members

The Committee received updates from management on the

Annual Report progress and audit throughout the process

as well as from the Company’s brokers and other advisers

The Committee, Chair and Executive Directors reviewed the

Annual Report in its final stages

Following this process, the Committee and then the Board were

able to confirm that the Annual Report, taken as a whole, is fair,

balanced and understandable, and provides the necessary

information for shareholders to assess the Group’s position,

performance, business model and strategy.

Christine Soden

Chair, Audit Committee

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Compliance statement

How the Board operates

The Board held eight scheduled meetings during the year and

additional Board meetings were also held to discuss emerging

matters such as capital markets day and shareholder engagement.

For each Board and Committee meeting, meeting papers are

provided in advance through a secure portal. Board papers

include standing items, such as financial performance and investor

relations updates, and special business such as strategic,

operational or governance matters, which are prepared by

Executive Directors, senior management, the Group General

Counsel & Company Secretary and/or external advisers. The

Board regularly invites ELT members to attend Board meetings

and receives presentations and updates from their relevant

business and functional areas.

Other key information, such as analyst/investor reports, Company

policies and governance guidelines, is available through the

secure portal.

Matters reserved for the Board

To ensure there is a clear division of responsibilities between the

Board and the running of the Company business, the Board has

a formal schedule of matters reserved for its decision. This is

reviewed on a periodic basis and is available on our website:

www.elementis.com.

Group financial report

Risk management and internal controls

Corporate governance

Group strategy

Acquisitions and disposals

Talent and succession

Culture and Values

Sustainability

Health and safety

Engagement with key stakeholders

Financial and trading statements

Board allocation of agenda time

Agendas for each Board meeting are prepared by the Group

General Counsel & Company Secretary as a rolling programme

over a 12 month period, but are reviewed regularly and updated

where appropriate. The agenda for each Board meeting is

agreed with the Chair, CEO and CFO.

Shareholder communications

The Chair is responsible for effective communication

with shareholders. The CEO and CFO are the Company’s

principal contacts for investors, analysts, press and other

interested stakeholders.

There is a dedicated investor relations programme for current

and potential investors, which is managed by the Head of Investor

Relations who reports to the CFO. Further information regarding

shareholder services can be found on page 193.

The UK Corporate Governance Code

For the year ended 31 December 2023, Elementis plc was

subject to the UK Corporate Governance Code 2018 (“the

Code”). The Code sets standards of good practice in relation

to all areas of corporate governance in the UK. In this Annual

Report, we report on how we applied the main principles of

the Code and complied with its relevant provisions.

We consider ourselves to be fully compliant throughout the year

ended 31 December 2023 and from that date up to the date of

approval of this Annual Report, save in relation to Listing Rule

LR9.8.6R(9) due to having 37.5% female Directors on the Board

as at 31 December 2023 and from that date up to the date of

approval of this Annual Report. The Board focused on Board

succession planning during 2023 and was pleased to announce

the appointment of Maria Ciliberti, effective from 11 March 2024.

The appointment of Maria brings the proportion of female

Directors on the Board to 50%, bringing the Board into full

compliance with Listing Rule LR9.8.6R(9). We note that Provision

10 of the Code provides that a tenure of more than nine years

on the board is considered a circumstance that could, or could

appear to, impair the independence of a non-executive director.

Steve Good reached a nine year tenure on the Board in October

2023 and was reappointed for a further six month period,

to April 2024. The Nomination Committee considered that Steve

would continue to demonstrate independence in character and

judgement despite having served nine years on the Board, and

that the Board would benefit from his extensive knowledge of the

Company and experience for the additional six month period,

which would enable the conclusion of the process to appoint

a new Non-Executive Director, as well as an orderly handover

of the Remuneration Committee Chair. Further information

regarding Steve’s independence can be found on page 85.

The Code is currently available at www.frc.org.uk.

1. Board leadership and company purpose

A. Board of Directors 74

B. Purpose, values, strategy and culture 82

C. Resource and control framework 66

D. Stakeholder engagement 26

E. Workforce policies and practices 47

2. Division of responsibilities

F. Leadership of Board by Chair 93

G. Board composition and responsibilities 93

H. Role of the Non-Executive Directors 93

I. Board policies, processes, information, time and resources 94

3. Composition, succession and evaluation

J. Board appointments and succession 85

K. Board skills, experience and knowledge 87

L. Annual Board and Committee evaluation 83

4. Audit, risk and internal controls

M. Financial reporting, external auditor and internal audit 89

N. Fair, balanced and understandable assessment 91

O. Internal financial controls and risk management 90

5. Remuneration

P. Linking remuneration with purpose and strategy 99

Q. Remuneration Policy review 104

R. Remuneration performance outcomes 113

Elementis plc

Annual Report and Accounts 2023

Roles and responsibilities of the Directors

The Board members have clearly defined roles and responsibilities, as set out in the table below. They also have a range of skills,

knowledge and experience that is relevant to the successful operation of the Board (see the biographies on pages 74-76 and

Board Composition and Skills table on page 87).

Non-Executive Directors

Chair

John O’Higgins

Leads the Board and is responsible for its overall effectiveness

Sets the agendas in consultation with the CEO, CFO and Group General Counsel & Company Secretary

Promotes open, honest and constructive debate, challenges during meetings and guides the CEO and

CFO in delivery of the strategy

Ensures the Board conforms with the highest standards of corporate governance

Chairs the Nomination Committee and ensures the Board has an appropriate balance of skills,

diversity and experience

Ensures effective succession planning is in place and leads the annual Board effectiveness review

Engages with shareholders and other stakeholders, and ensures that their views are understood and

considered appropriately in Board decision making

Senior Independent

Director

Trudy Schoolenberg

Acts as a sounding board to the Chair, providing support and advice where necessary

Is the point of contact for shareholders and other stakeholders to discuss matters of concern

Leads the Board’s appraisal of the Chair’s performance with the Non-Executive Directors

Independent

Non-Executive

Directors

Maria Ciliberti,

Dorothee Deuring,

Steve Good,

John O’Higgins,

Trudy Schoolenberg,

Christine Soden,

Clement Woon

Provide independent oversight objectivity to the Board’s deliberations

Use their broad range of experience and expertise to challenge management and aid decision making

Serve on various Committees and play a leading role in the effectiveness of those Committees

Executive Directors

CEO

Paul Waterman

Day-to-day management of the business

Execution of strategy and operational performance

Provides regular updates to the Board on all significant matters relating to the Group

Ensures the Company has a strong team of high calibre executives

Puts in place management succession and development plans

CFO

Ralph Hewins

Supports the CEO in the delivery of the Company’s strategy and financial performance

Leads the Group Finance function and is responsible for financial reporting, investor relations,

IT, risk, insurance and tax matters

Plays a key role in external stakeholder relationships, including investment community, lenders

and pension trustees

Group General Counsel & Company Secretary

Anna Lawrence Supports the Chair in ensuring the Board operates efficiently and effectively

Provides the Board with advice on governance developments

Facilitates the Directors’ induction programmes and assists with ongoing training and development

Assists the Chair with the Board effectiveness review process

Designated Non-Executive Director for workforce engagement

Christine Soden Represents the Board when engaging and communicating with employees and provides communication

on any outcomes

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Compliance statement

continued

Independence of the

Non-Executive Directors

Each of the Non-Executive Directors is considered independent in

character and judgement. The Chair was considered independent

on appointment and the Board confirms that he remains effective.

The independence of Non-Executive Directors is reviewed

annually by the Nomination Committee, with the continuing

independence of Steve Good being subject to a particularly

rigorous review, in view of his longer service, as described

further on page 85.

The biographies of the Directors can be found on pages 74-76 and

details of the membership of each Board Committee can be found

on pages 84, 88 and 96 respectively.

Time commitment

Following the Board evaluation process, as detailed on page 83,

the Board has considered the individual Directors’ attendance,

contribution and external appointments, and is satisfied that each

of the Directors is able to allocate sufficient time to the Group to

discharge their responsibilities effectively. Information on Directors’

external appointments can be found on pages 74-76. The

Directors’ commitments register is maintained by the Group

General Counsel & Company Secretary and is regularly reviewed

by the Nomination Committee. All Directors are expected to

commit sufficient time to the Board, and the Company, as is

necessary to carry out their duties as a Director.

Additional appointments

If a Non-Executive Director wishes to take on an additional

external appointment, they are required to seek permission

from the Board. The Board will take into consideration the time

commitment required by the Non-Executive Director in their role

as a Board Director, Committee Chair or Committee member

before any permission is given.

Executive Directors are not permitted to take on more than

one non-executive directorship of a FTSE 100 company or

other significant appointment. No such external appointments

are currently held by any of the Executive Directors.

In March 2023 and April 2023, Dorothee Deuring notified

the Board of her wish to take on additional appointments as

a board member of PolyPeptide Group AG and Temenos AG.

The Board considered Dorothee’s external commitments and

additional time required for the new proposed roles and concluded

that Dorothee would still have sufficient time to perform her role

with the Company.

In May 2023, Steve Good notified the Board of his wish to take

on an additional appointment as non-executive director and

non-executive board chair designate of Norcros PLC. The Board

considered Steve’s external commitments and additional time

required for the new proposed role and concluded that Steve would

still have sufficient time to perform his role with the Company.

In September 2023, Trudy Schoolenberg notified the Board of her

wish to take on an additional appointment as Senior Independent

Director of Accsys Technologies PLC. The Board considered

Trudy’s external commitments and additional time required for

the new proposed role and concluded that Trudy would still have

sufficient time to perform her role with the Company.

The Board also considered whether the new appointments for

Dorothee, Trudy and Steve would be a conflict of interest and

concluded that they would not.

Conflicts of interest

Elementis plc has a Conflicts of Interest Policy in place for all

Group companies. Our Board and its Committees consider

potential conflicts at the outset of every meeting and the Board

formally reviews the authorisation of any potential conflicts of

interest throughout the year, with any conflicts being recorded

in the Conflicts of Interest Register.

The Conflicts of Interest Register sets out any actual or potential

conflict of interest situations which a Director has disclosed to the

Board in line with their statutory duties and the practical steps that

are to be taken to avoid conflict situations. When reviewing conflict

authorisations, the Board considers any other appointments held

by the Director as well as the findings of the Board effectiveness

evaluation. Directors are required to seek Board approval for any

actual or potential conflicts of interest. Ralph Hewins is in receipt of

a conflict authorisation from the Company in respect of him acting

as a trustee of the Elementis Group Pension Scheme. Further

details can be found in the Directors’ report on page 123.

Directors’ insurance and indemnities

The Company maintains Directors’ and Officers’ liability insurance,

in the event of legal action brought against its Directors.

The Company has also granted indemnities to each of the

Directors. These indemnities are uncapped in amount, in relation

to certain losses and liabilities which they may incur to third parties

in the course of acting as a Director of the Company. Neither the

indemnity nor insurance provides coverage in the event that

a Director is proved to have acted fraudulently or dishonestly.

Board training and independent advice

All Directors have access to the advice and services of the

Group General Counsel & Company Secretary and may take

independent professional advice, as appropriate, at the expense

of the Company.

Directors are given the opportunity throughout the year to

undertake training and attend seminars, as necessary, to keep

their skills and knowledge up to date. In addition, technical

briefings are regularly included in Board and Committee papers.

The Group General Counsel & Company Secretary supports

the Chair in ensuring that the Board and its Committees operate

within the governance framework and that communication

and information flows within the Board and its Committees,

and between management and Non-Executive Directors,

remain effective.

Information flows

The Chair and the Group General Counsel & Company Secretary

ensure that the Directors receive clear and timely information on all

relevant matters. Board papers are circulated in a timely manner in

advance of the meetings to ensure that there is adequate time for

them to be read and to facilitate robust and informed discussion.

A fully encrypted electronic Board portal is used to distribute

Board and Committee papers and to provide efficient distribution

of business updates and other resources to the Board.

Elementis plc

Annual Report and Accounts 2023

Board induction

The Chair, with support from the Group General Counsel & Company Secretary, is responsible for preparing and coordinating

an appropriate induction programme, which is to be tailored to the needs of each newly appointed Non-Executive Director.

Newly appointed Directors will be provided with a thorough briefing on their fiduciary duties and continuing obligations from

the Group General Counsel & Company Secretary, supported by external legal advisers, if required.

Board induction programme

Induction –

general topics

The role of the Director

Board and Committees

Board meetings

Rules, regulations and guidance

Board procedures

Current issues

Nature of the Company, its business and its markets

The Company’s main relationships

Induction –

Board

Committees

(as appropriate)

Role and remit of the Committee

Link between the Committee’s policy and the Company’s strategic objectives

The annual meeting schedule for the Committee

The main business conducted by the Committee

The legal requirements relevant to the Committee’s operations

Market practice and current trends relevant to the Committee

Current issues

Views of investors on matters considered by the Committee and potential areas of focus

Any technical training on key matters

Induction –

external advisers

Meetings with:

External auditors

Internal audit function

Remuneration consultants

Brokers

Lawyers

Induction –

senior

management

meetings

Meetings with:

All ELT members

IT Director

Group Financial Controller & Head of Tax

Head of Investor Relations

Global Director Sustainability

Induction –

site visits

Key Elementis operating and corporate sites globally

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Index page

96 Annual statement of the Chair

of the Remuneration Committee

99 Remuneration at a glance

Directors’ Remuneration Policy

103 Policy report

104 Policy table

106 Share ownership guidelines

109 Recruitment policy

110 Service contracts

110 Paymentforlossofoffice

110 Treatment of incentive plans

111 Non-Executive Directors’

– terms of appointment

111 Shareholder engagement

Annual Report on Remuneration

112 Remuneration payable

to Directors for 2023

113 Annual bonus for performance

in 2023

115 Directors’ share based awards

117 Directors’ scheme interests

118 Directors’ share interests

118 Directors’retirementbenefits

118 Payments to past Directors

forlossofoffice

119 Total shareholder return

119 CEO to all-employee pay ratio

120 Relative importance of spend on pay

120 Percentage change in remuneration

of the Directors

121 Statement of shareholder voting

121 Other information about the

Committee’s membership

and operation

121 Terms of reference

122 Activities during the year

The Directors’

Remuneration report

The Directors’ Remuneration report

is set out in the following parts:

1. This Annual Statement from

the Chair of the Remuneration

Committee summarising how our

Remuneration Policy has been

implemented and the key decisions

taken by the Committee

2. At a glance section providing an

overview of how we implemented

the Remuneration Policy during the

year under review

3. The Directors’ Remuneration Policy

for which shareholder approval was

received in a binding vote at the

AGM held on 26 April 2022 with

c.97% votes in support

4. The Annual Report on Remuneration

which provides full detail on how we

paid Directors during 2023 and how

we propose to implement the Policy

in 2024

The Directors’ Remuneration

Report (excluding the Directors’

Remuneration Policy) will be presented

to shareholders for approval at the

AGM on 30 April 2024 and I hope you

will vote in support of the resolution.

Dear Shareholders,

As Chair of the Remuneration Committee the (‘Committee’),

I am pleased to present the Directors’ Remuneration report

for the year ended 31 December 2023. This report should be

read in conjunction with the separate section on compliance

under the UK Corporate Governance Code on page 92.

Attendance at Remuneration committee meetings

Member Member since

Eligible

meetings

(max 4) Attendance

Steve Good (Chair) October 2014 4 4

Dorothee Deuring March 2017 4 4

John O’Higgins February 2020 4 4

Christine Soden November 2020 4 4

Trudy Schoolenberg March 2022 4 4

Clement Woon December 2022 4 4

Steve Good

Chair, Remuneration Committee

Directors’ Remuneration report

Annual statement of the Chair of the Remuneration Committee

Elementis plc

Annual Report and Accounts 2023

Remuneration policy

As a global specialty chemicals company, Elementis offers

performance driven additives that help create innovative

formulations for consumer and industrial applications. We have

market leading positions in high performance ingredients in the

Performance Specialties and Personal Care markets. We have

a global footprint, with sites in Europe, Asia and the America’s,

and a talented leadership team located across the world. Our

strategy is to deliver long term sustainable shareholder value

throughinnovation-ledgrowthandtheexecutionofefficiency

savings. We continue to deliver solid progress against this

strategy, improving both our margin and leverage.

Our Remuneration Policy has been purposefully designed to

support our strategy detailed above. Our overall policy is set with

reference to UK benchmarks, with flexibility retained to pay above

UK norms where executives are recruited from overseas. Our pay

modelisUK-centricandincludesbasesalary,pensionandbenefits,

annual bonus, and a performance share plan (the same policy

cascades below Executive Director level but includes restricted

stock as well as performance shares in recognition of local market

practice in the geographic locations in which we operate).

Remuneration is weighted towards long term variable pay which

supports the long term nature of the investment decisions we

make. Our performance metrics are fully aligned with strategy

as set out above.

At the 2022 AGM, we received 97% support from shareholders

for the 2022 Directors’ Remuneration Policy which is intended

to apply until the 2025 AGM.

Remuneration in 2023

As detailed in the Strategic report, performance in 2023 was

extremely resilient with good progress against our Innovation,

GrowthandEfficiencystrategy.Thiswasachievednotwithstanding

the challenging external market context and as a direct result of the

strong leadership of our executive team and the commitment and

motivationofourtalentedworkforce.In2023,adjustedGroupprofit

before tax grew 4% representing strong performance in very

challenging markets. However, our performance in relation to average

trade working capital to sales ratio, one of our bonus metrics, was

marginally below the lower end of the range of bonus targets with

our performance against this metric continuing to be impacted by

a combination of industry destocking and supply chain disruption.

InlinewiththestrategicfocusonInnovation,GrowthandEfficiency,

we achieved a 14.3% contribution to revenue from our innovation

pipeline, delivered $51m of new business, increasing our future

pipeline, and delivered over $10m of annualised cost savings. This

was all achieved while delivering our safety targets and continuing to

progress our sustainability agenda. Furthermore, we also completed

the sale of our Chromium business in January 2023 which resulted in

Elementis becoming a more focused specialty chemicals business.

Annual bonus

As a result of the above, following the Committee undertaking

a formal assessment of performance against the targets, bonuses

were payable at 74% of maximum for the Executive Directors.

Across Elementis, circa 95% of employees are expected to receive a

bonus with awards to be paid up to circa 80% of maximum depending

uponindividualperformanceandspecificbonusplantargets.

The Committee was comfortable with the bonus earned in the

context of the performance delivered, and the bonuses awarded

across the Company, and so did not consider it necessary to

use discretion in relation to the bonus outturn.

Further details of the targets set for 2023 and the actual

performance achieved are disclosed on page 100.

Long term incentive plan (“LTIP”)

The 2023 LTIP awards were granted on 3 April 2023 based on

normal award levels of 200% of salary for the Chief Executive and

175%ofsalaryfortheChiefFinancialOfficer.

The metrics were equally weighted on earnings per share (“EPS”),

total shareholder return (“TSR”) and cash conversion. The vesting

of the award is also subject to a return on capital employed

underpin which requires the Committee to consider whether the

return generated is in line with the Board’s expectations and,

if not, to reduce the vesting to a more appropriate level. In addition,

the Committee will retain discretion to reduce the number of

shares on vesting should it be considered appropriate to do

so (e.g. in the event that there was perceived windfall gain).

Full details of the targets and the awards are set out on page 100. To

the extent these awards vest at the end of the three year performance

period, shares will be required to be held for a further two years.

Based on the performance measured over the three years to

31 December 2023, the 2021 LTIP awards will vest at 54.7% of

the maximum. This is based on achievement against the targets set at

grant, including delivering a growth in earnings per share of 66% and

a TSR of 21.5% over the three year period, and satisfying the ROCE

financialunderpintotheaward,withROCEincreasingsignificantlyover

the three year performance period in challenging market conditions.

Following the divestment of the Chromium business, the 2021

LTIP performance targets were reviewed with EPS re-stated to

reflect the change (also applied to the 2022 Awards). This ensured

the targets were no more or less challenging than when originally

set (i.e. Chromium was excluded from the base and end targets

so the condition was tested on a consistent basis).

In determining vesting, the Committee also considered the

potential for windfall gains and concluded that the value on vesting

ofthe2021awardsdidnotbenefitfromwindfallgains.Inreaching

this conclusion, the Committee noted that the share prices used

as the basis of converting awards set as a multiple of salary into

shares was £1.2550 which was consistent with the share price in

February 2020 prior to the onset of the Covid pandemic and the

market wide fall in share prices. Accordingly, the Committee

did not use any discretion in connection with the 2021 award.

Further details are included on page 100.

The Committee believes that the overall incentive outturns and

approach to target setting (as detailed above) were appropriate

based on the Company’s performance over the whole

performance period and demonstrates that the Committee has,

and will continue to, set performance targets which it considers

to be meaningful and appropriately stretching. As a result,

the Committee is comfortable that its general approach to

remuneration and the overall policy framework are working as

intended. In reaching this conclusion, the Committee did consider

the quantum of remuneration earned at both executive level and

across the Company (including considering pay ratios) and

determined that our overall remuneration policy and outcomes

were appropriate and proportionate. As detailed in the sections

above, the Committee did not use discretion during the year.

Remuneration in 2024

The Committee considers the Policy to be operating effectively.

As a result, the only change that the Committee is making for FY

2024isamodestrefinementtothechoiceofperformancemetrics

for this year’s long term incentive award. The change will better

align our long term incentive plan performance targets, measured

totheendofthe2026financialyear,withthe2026financial

targets set out in our November 2023 CMD presentation.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Salary review: The Executive Directors’ base salary increases

will be 4% for the CEO and CFO for 2024. These increases are

below the workforce salary increase budgets for each location,

which was 4.5% in both the US and UK, in recognition of current

market conditions and a modest weighting of salary budgets

towards the wider workforce.

2024 annual bonus: There will be no change to the quantum of

the Executive Director bonus opportunity and as such the CEO

will have the opportunity to earn up to 150% of salary and the

CFO up to 125% of salary.

As for 2023, the bonus will be based 70% against a challenging

rangeoffinancialtargets(50%onadjustedGroupprofitbefore

tax and 20% on average trade working capital (“AWC”) to

sales ratio on total operations), with the remaining 30% based on

non-financialstrategicobjectiveswhicharespecificandmeasurable

objectives that are related to the Company’s strategic priorities.

Thenon-financialtargetsfor2024willagainbefocusedon

sustainability and strategic targets. Reflecting the continued

Group-widefocus,halfofthenon-financialtargetswillrelateto

sustainability,withthebalanceofthenon-financialtargetsrelating

toInnovation,Growth,andEfficiencywhichaimtosupport

strengthening of our operating margin over the next three years.

Summary details of our approach to target setting are detailed

onpage101andfulldetailsofthefinancialtargetrangesand

our performance against them will be disclosed on a retrospective

basis in next year’s report. The Committee has discretion to modify

the overall amount of bonus payable to ensure it is appropriate.

50% of any bonus earned is deferred in shares for two years.

2024 LTIP awards:SubjecttofinalCommitteereviewpriortogrant,

awards are expected to be granted at 200% of salary for the CEO and

175% of salary for the CFO. The awards will be subject to an overriding

Committee discretion to reduce the awards at vesting should there be

a perceived windfall gain.

The primary performance targets will be as per the 2023 awards

plustheadditionofanoperatingprofitmargintargettoalignwith

CMD, with 25% based on EPS, 25% based on cash conversion,

25% based on TSR performance conditions and 25% based upon

operatingprofitmargin.

The EPS targets will be set based on the level of EPS achieved

in 2026, with vesting to take place from 14.0 cents to

18.5 cents, with threshold vesting set at 0% and to take place

from 14.0 cents, with vesting increasing to 50% at 17.0 cents

and then increasing further to maximum vesting at 18.5 cents

or greater. Vesting between performance points will occur on a

straight line basis. The range of EPS targets is more demanding

than those set for the 2023 LTIP award. The target range was

set to align with the outcomes of our CMD commitments.

External expectations for our future performance were also

considered as part of the target setting process

The three year average operating cash conversion targets will

be set based on a range of 80% to 100%, consistent with

the range that applied to the 2023 awards, reflecting market

conditions, and aligned with the Company’s publicly stated

ambitious medium term target of 90% (or greater) three year

average operating cash conversion by 2026. Threshold to

maximum vesting runs from 0% to 100% on a straight-line basis

TSR will continue to be assessed against the constituents of the

FTSE All-Share Index (excluding investment trusts). Threshold

vesting starting at 25% for median performance, increasing on

a straight-line basis, with 100% vesting for achieving at least

upper quartile performance

 Operatingprofitmargin(“OPM”)targetswillbesetbased

upon the level of OPM achieved in 2026 to align with the CMD

commitments, with vesting to take place from 18.0% (threshold)

to 20% (maximum). Threshold vesting is set at 0% and to take

place at an OPM of 18%, with vesting increasing to 50% at an

OPM of 19%, and then increasing further to maximum vesting

at an OPM of 20%. Vesting between performance points will

take place on a straight-line basis

Vesting based on the primary performance conditions will be

subject to a return on capital employed underpin. This will require

the Committee to consider the vesting result determined based

on the application of the EPS, TSR, OPM and operating cash

conversion performance conditions in light of the return on

capital employed achieved during the three-year period ending

31 December 2026 relative to the Board’s internal targets and

planning over the period. If the Committee does not consider

the vesting result appropriate considering the return on capital

employed achieved, the underpin enables vesting to be reduced

to a more appropriate level.

Context of Directors’ pay within the Company

Christine Soden is the Designated Non-Executive Director

(“DNED”) for workforce engagement. During the year Christine

held focus groups with employees in UK, China and Taiwan, each

of which included discussion around compensation. Two further

focus groups were held with all people managers globally (c.250)

in January 2023 by myself, Christine Soden and Chris Shepherd,

ChiefHumanResourceOfficer(“CHRO”)toexplaingovernance

of remuneration at Elementis, to show how the policy is applied

throughout the organisation, and to take feedback. The session

including polling questions to assess understanding and questions

and answers. The output of these sessions included the Board

gainingconfirmationthatmanagersunderstandthebasisonwhich

our pay programmes are set, including the link to strategy, and how

Directors’ remuneration is determined.

A Company-wide external pay benchmarking exercise was

undertaken during 2022 as part of a standard three year review

process. This review concluded that employees are generally

well positioned against industry benchmarks.

The Group is not required to provide disclosure of the CEO to

all-employee pay ratio given the Group has less than 250 employees

in the UK. However, given the external focus on pay ratios, the

Committee has included full pay ratio disclosure on page 119 and is

comfortable that the ratio is in line with the Company’s pay policies

and in line with current FTSE market practice.

The Group is also not required to report under the gender pay

gap regulations. Despite this, the Group reviews gender pay

on a biennial basis. The last gender pay review was completed

towards the end of 2022 concluding that the approach to pay

was fair and equitable with any anomalies adjusted accordingly.

The CEO pay ratio and gender pay gaps are taken into account

when there is a full review of the Executive Director and wider

Remuneration Policy.

Concluding remarks

The Committee believes that the Policy and our approach to

implementation are in the best interests of the Company and we

hope that you will support the actions the Committee has taken

by voting in favour at the 2024 AGM. If you have any feedback,

please feel free to contact me via the Group General Counsel

& Company Secretary at company.secretariat@elementis.com.

Steve Good

Chair, Remuneration Committee

Annual statement of the Chair of the Remuneration Committee

continued

Elementis plc

Annual Report and Accounts 2023

Implementation of Remuneration Policy in 2023

ThesectionbelowsummariseshowthePolicywasimplementedinthefinancialyearended31December2023.Furtherdetailsare

provided on pages 109 to 118.

Key Policy features Performance assessment How we implemented in 2023

Salary

Increases normally guided by

the general increase for the

local workforce and/or broader

workforce as a whole

Not applicable

Paul

Waterman

Ralph

Hewins

2023 salary £804,197

£397,691

1 Equivalent to $995,033.

The salaries of the CEO and CFO were increased

by 3.2% and 4.5% respectively. These were

below the average increases awarded to the US

and UK salaried workforce. These changes were

effective from 1 January 2023.

Pension/benefits/all employee

share schemes

Pension: In line with the phased pension

contribution detailed in the 2021

Remuneration Policy, the CEO and

CFO pension contribution reduced

to a maximum of 21% from 1 December

2022, to align with the typical UK

workforce pension funding rate of

21% of salary

 Benefits:Directorsreceivemarket

competitivebenefitsandmayparticipate

in all-employee share schemes

Not applicable

Paul

Waterman

Ralph

Hewins

Pension £161,842

£83,515

1 Equivalent to $200,247.

2023 at a glance

Our 2023 measures

Annual bonus

Adjusted Group profit before tax (“PBT”):

50% weighting

Adjusted AWC to sales ratio:

20% weighting

Non-financial objectives (aligned with strategic

implementation, safety and environment, and people):

15% weighting – Sustainability targets

15% weighting – Strategic targets

2023 LTIP How our measures link to strategy

Performance metrics

Strategic priorities

Innovation Growth Efficiency

Bonus Financial: (70%)

Adjusted Group PBT

AWC to sales ratio

Non-financial: (30%)

Sustainability targets

Innovation,GrowthandEfficiency

LTIP EPS (33%)

Relative TSR versus FTSE All-Share (33%)

Cash conversion (33%)

ROCE underpin

2023 LTIP

EPS:

33% weighting

Relative TSR:

33% weighting

Cash conversion:

33% weighting

ROCE underpin

Strategic Report Financial Statements Shareholder InformationCorporate Governance

Elementis plc

Annual Report and Accounts 2023

Directors’ Remuneration report

continued

Key Policy features Performance assessment How we implemented in 2023

Annual bonus

Performance related scheme

which delivers value for achievement

against annual targets

Committee may adjust outturn where

formulaic assessment is inconsistent

with Company’s overall performance

50% of bonus earned deferred into

shares for two years

Recovery and withholding

provisions apply

Paul

Waterman

Ralph

Hewins

Opportunity 150% of

salary

125% of

salary

PBT $84.5m vs target

of $71.2m

Payout

(50% of bonus)

100% of PBT

maximum

AWC to sales ratio 25.1% vs target of 22.3%

Payout

(20% of bonus)

0% of AWC

maximum

Non-financial See page 115

Payout

(30% of bonus)

80% of

Non-

financial

maximum

80% of

Non-

financial

maximum

Total 74% of

maximum

74% of

maximum

Further information can be found on

pages 113 -114.

As detailed in the Annual Statement on

page 96, 2023 was a year of continued

progress against our Innovation, Growth

andEfficiencystrategy.

We delivered 4.4% growth in adjusted

operatingprofitto$84.5mwhichwasabove

our internal planning; however the AWC ratio

of 25.1% was slightly below the lower end of

the performance range.

The PBT targets for 2023 were lower than

2022 as a result of excluding Chromium post

its sale but were no more or less challenging

when they were set than in prior years.

Long term incentive plan

Performance measures based on

financialand/orrelativeTSRmetrics

and measured over three years

Committee may adjust outturn where

formulaic assessment is inconsistent

with Company’s overall performance

Holding period applies for two years

following vesting

Recovery and withholding

provisions apply

ROCE underpin

2021 Award

EPS

growth

Average

cash

conversion

TSR vs

FTSE All

Weighting 33.3% 33.3% 33.3%

Threshold

target

8.4 cents 85% Median

Maximum

target

10.9

cents

95% Upper

quartile

Actual 10.82

cents

77% 66.5

percentile

Vesting 32.3%/

33.3%

0%/

33.3%

22.44%/

33.3%

Further information can be found on pages

115 -117.

The relative TSR and EPS over the

performance period were above the threshold

target; however, the average operating cash

conversion target was not met. Overall, this has

resulted in 54.7% of the award vesting. With

regard to the ROCE underpin, the Committee

considered the vesting result appropriate

having had regard to the ROCE increasing

during the period by 64% with this achieved

indifficulteconomicconditions.

The Committee considered the potential for

any windfall gains on vesting, but noting that

the awards were granted from a share price of

£1.2550, which was consistent with the share

price in February 2020 prior to the onset

of the COVID-19, concluded that there were

no windfall gains. Shares are subject to the two

year holding period. Further details are set out

on page 113.

Share ownership guidelines

Build up and maintain a shareholding

equal to 200% of salary

The guideline also applies for two

years post cessation of employment

Paul

Waterman

Ralph

Hewins

Guideline 200% of

salary

200% of

salary

Level Achieved

203% of

salary

On track

97% of

salary

1 For the purposes of the guideline, an estimate

has been made in relation to the after tax number

of shares in relation to vested/unexercised

share awards.

Both the CEO and CFO increased their

holdings during the year.

Further information can be found on

page 118.

100

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Annual Report and Accounts 2023

Implementation of Remuneration Policy for 2024

As a UK Listed business, our primary reference points for both quantum and remuneration structure for our Executive Directors are

UK benchmarks. However, as noted in our policy, we retain flexibility as to where we position individuals against UK benchmarks to

take into account the locations in which they work and also the relevant market for talent. With our CEO being a US Citizen, based in the

US, splitting his time between the UK and US, his remuneration quantum is set to be aligned with UK market practice both in terms of

structure and quantum. However, recognising that remuneration quantum is above UK levels in US businesses of a similar size and

complexity, his total remuneration package is positioned towards upper quartile versus UK FTSE 250 benchmarks. For completeness,

this market positioning is considered appropriate on the basis that versus US companies of a comparable size and complexity his

remuneration quantum falls between lower quartile and median.

ThesectionbelowsummariseshowtheCommitteeintendstoimplementthePolicyfortheforthcomingfinancialyearending

31 December 2024.

Key Policy features 2024 implementation

Salary

Level based on the scope and

responsibilities of the role

Increases normally guided by the

general increase for the local workforce

and/or broader workforce as a whole

The Committee reviewed salaries and decided to award Paul Waterman and Ralph

Hewins each a salary increase as shown in the table below, which is lower than 4.5%

budgeted for the US and UK salaried workforce

Paul Waterman Ralph Hewins

Salary as at 1 January 23 $995,033 £397,691

Salary as at 1 January 24 $1,034,834 £413,599

2024 increase 4.0% 4.0%

Pension/benefits/All-employee

share schemes

 Pension:CEOparticipatesinUSspecific

arrangements and receives a salary

supplement and the CFO receives

a salary supplement

Any new Director appointment will

have pension set at 8% of salary in line

with that offered to new joiners across

the wider workforce

 Benefits:Directorsreceivemarket

competitivebenefitsandmayparticipate

in all-employee share schemes

Implementation in line with the Policy

Pension rates for incumbent Directors for 2024 are aligned with the typical UK

individual pension funding rates (see page 118 for further detail)

Annual bonus

Policy maximum of 150% of salary for

CEO and 125% of salary for CFO

Performance related scheme which

delivers value for achievement against

annual targets

Committee may adjust outturn where

formulaic assessment is inconsistent

with Company’s overall performance

50% of bonus earned deferred into shares

for two years

Recovery and withholding provisions apply

Link to KPIs

Adjusted Group PBT

AWC to sales ratio

Individual objectives linked to sustainability

and strategic priorities

Paul Waterman Ralph Hewins

Opportunity 150% of salary 125% of salary

Performance metrics

Adjusted Group PBT: 50%

AWC to sales ratio: 20%

 Non-financialstrategicpriorities:30%ofwhich15%basedonappropriatelystructured

sustainability priorities with the remaining 15% set on Innovation, Growth and

Efficiencytargets.

The targets are fully aligned with the Company’s current strategy and have been set

to be challenging in the context of the Company’s performance expectations for the

year ahead

The Committee considers that the bonus targets are commercially sensitive and

therefore plans to disclose them only on a retrospective basis in next year’s Directors’

Remuneration report

The range of targets around budgeted performance levels to apply in 2024 has been

calibrated to take into account the current external environment and internal planning

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Annual Report and Accounts 2023

Key Policy features 2024 implementation

Long term incentive plan

Policy maximum is 250% of salary

Awards vest to the extent performance

conditions are achieved

 Performancemeasuresbasedonfinancial

and/or relative TSR metrics and measured

over three years with a ROCE underpin

Committee may adjust outturn where

formulaic assessment is inconsistent with

Company’s overall performance and/or

there is a perceived windfall gain

Holding period applies for two years

following vesting

Recovery and withholding provisions apply

ROCE underpin introduced for the 2019

awards continues to apply

Link to KPIs

EPS

Relative TSR

Cash conversion

OPM

The choice of targets relates to measuring

the Company’s success in delivering

profitablegrowthandsustainable

shareholder returns

Paul

Waterman

Ralph

Hewins

LTIP Award 200% of salary 175% of salary

Performance metrics

Weighting

Threshold

target

Threshold

vesting

Intermediate

Target

Intermediate

Target

vesting

Maximum

target

Maximum

Vesting

2026 EPS 25% 14 cents

per share

0% 17 cents

per share

50% 18.5 cents

per share

100%

2026 OPM 25% 18.0% 0% 19% 50% 20% 100%

Cash

conversion

25% 80% 0% N/A N/A 100% 100%

Relative

TSR vs FTSE

all-share index

25% Median 25% N/A N/A Upper

quartile

100%

Straight line vesting takes place between performance points.

The range of EPS targets is more demanding than those set for the 2023 LTIP award.

The target range was set to align with the outcomes of our CMD commitments and

external expectations for our future performance. Note (i) that vesting takes place from

0% (as opposed to the market norm of 25%), and (ii) in line with institutional investor

expectations, the range straddles consensus growth expectations

Cash conversion is the three year average operating cash conversion. The target

remains set to align with the medium term goal, whilst the wider range used in 2023

continues to apply in recognition of continuing market conditions

OPM – introduced in 2024 to align with CMD commitments made in November 2023

for end 2026

 Thetermsoftheaboveawardswillbesubjecttoafinalreviewpriortograntandthe

awards will be subject to an overriding Committee discretion to reduce the awards at

vesting should there be a perceived windfall gain

Chair and NED fees

To attract individuals with the relevant

skills, knowledge and experience that the

Board considers necessary in order to

maintain an optimal mix that ensures the

effectiveness of the Board as a whole in

carrying out its duties and responsibilities

Fees will increase by 4% for the upcoming year, which is lower than the UK workforce,

where the budgeted increase is 4.5%.

2024 2023

2023

increase

Basic fees

Chair £216,225 £207,909 4.0%

Non-Executive Director £58,538 £56,286 4.0%

Additional fees

Senior Independent Director £10,172 £9,780 4.0%

Chair of Audit or Remuneration Committee £10,172 £9,780 4.0%

Workforce engagement NED £5,087 £4,891 4.0%

Directors’ Remuneration report

continued

102

Elementis plc

Annual Report and Accounts 2023

Remuneration Policy report

The 2021 Remuneration Policy (approved by shareholders at the AGM on 26 April 2022) has been summarised here for ease of

reference, with factual data updated where appropriate (e.g. scenario charts, contractual terms, page references etc.). The Policy as

approved by shareholders can be found in the Elementis plc Annual Report and Accounts 2021 available on the corporate website.

The Committee determines the Remuneration Policy taking into account all relevant factors. The Committee receives input from

management and external advisers with respect to the design of the Policy and consider the context of the relevant stakeholders when

considering their input. The Committee determines the Policy applicable to the Executive Directors and the Chair, with the Policy for

Non-Executive Directors agreed by the Board, excluding the Non-Executive Directors. This also applies when with respect to the

implementation of the Policy so that no individuals are involved in decisions as to their own remuneration. The Committee concluded

that the Policy continues to support the long term strategy of the company and as such only minor changes were required.

The Policy is aligned with the six factors listed in Provision 40 of the UK Corporate Governance Code:

Clarity – the Policy is set out as transparently as possible and the workforce engagement Director retains oversight of employee

communication and education. We proactively consult our shareholders on any proposed changes to remuneration policy

Simplicity – the Remuneration Policy is structured as simply as possible; however, a degree of complexity is required to align pay

andperformance.Performancemetricsarechosentofocusonthekeyoperational,financialandstrategicperformanceobjectives

of the business

Risk – the Remuneration Policy has been shaped to discourage inappropriate risk taking, including long term performance

measurement, deferral and shareholding guidelines which extend into post employment. The Committee retains discretion to override

formulaic outcomes

Predictability – elements of the Policy are subject to caps and dilution limits. Examples of how remuneration varies depending on

performance is set out in the scenario charts

Proportionality–thereisasensiblebalancebetweenfixedpayandvariablepay,andincentivepayisweightedtosustainable

long term performance

Alignment to culture – the Policy is weighted towards performance related pay which supports a performance based culture and

thenon-financialtargetsencourageinnovationandoptimisationwhicharealsocentraltotheElementiscultureandisalignedto

Company Values

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Elementis plc

Annual Report and Accounts 2023

Policy table

The information in the table below sets out the Remuneration Policy for Directors.

Basic salary

Purpose and link

to Company’s

strategy

Targeted at a level to attract and retain world class executives who are essential to drive the business

forward and deliver the Company’s strategic goals.

How it operates

in practice

Annual salary increases that are broadly in line with the local workforce (in percentage of salary terms),

subject to Committee approval.

Increases beyond the average of those granted to the local workforce (in percentage of salary terms)

may be awarded in certain circumstances, such as where there is a material change in responsibility or

experienceoftheindividual,torecogniseexceptionalperformanceoverasustainedperiodorasignificant

increase in the complexity, size or value of the Company.

Where new joiners or recent promotions have been placed on a below market rate of pay initially, a series

of increases above those granted to the local workforce (in percentage of salary terms) may be given over

the following few years subject to individual performance and development in the role.

Salaries are normally reviewed in December and any changes are effective from 1 January in the

following year.

Maximum

potential value

There is no prescribed maximum for salary increases. The Committee will be guided by the general

increase for the local workforce and/or broader workforce as a whole, as well as the circumstances

listed above.

Benefits

Purpose and link

to Company’s

strategy

Toaidretentionandtoremaincompetitiveinthemarketplace.Healthcarebenefitsinordertominimise

business disruption.

Executive Directors may also participate along with other employees in the Group’s HMRC approved

SAYE or other equivalent savings based share schemes to share in the success of the Group.

How it operates

in practice

Life assurance and private medical health insurance are provided.

Provision of either a company car (for business and personal purposes) or a car allowance.

Payments in connection with an international assignment and payments in connection with a relocation,

which would typically be paid for a transitionary period only, tailored to the location of each executive.

Thebenefitsmayincludeprovisionoftaxadvicewhere,attheCompany’srequest,theinternational

location (or balance of time spent in different locations) is changed.

Participation in all-employee/savings based share option schemes as above.

Inaddition,benefitsintheUS,whereitisstandard,includecoverfordentalcosts,accidentaldeathand

disablement, long term disability and club membership.

Maximum

potential value

SAYE/savings based schemes are subject to individual limits. These are $2,000 per month in the US and

up to the HMRC prescribed limit (£500 per month) in the UK.

Otherbenefits:theCommitteewilldeterminethelevelofbenefitasitconsidersappropriate,takinginto

consideration local market practice.

Pension

Purpose and link

to Company’s

strategy

To aid retention and remain competitive in the marketplace.

Toprovideappropriateretirementbenefitscommensuratewithlocalmarketpractice,seniorityoftherole

and tenure with the Company.

How it operates

in practice

Executive Directors are eligible to participate in a Company sponsored pension scheme, a statutory

pension arrangement, receive cash in lieu of a Company pension or a combination of these.

Maximum

potential value

For incumbent Executive Directors, pensions are set to be aligned with the rate of pension provision most

commonly provided to a typical UK employee (as at the time of setting the current remuneration policy)

of 21%.

Any new Director appointment will have pension set to be aligned with the average of the appropriate

wider workforce rate (currently 8% of salary).

Directors’ Remuneration report

continued

104

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Annual Report and Accounts 2023

Annual bonus scheme

Purpose and link

to Company’s

strategy

To incentivise the senior management team to exceed the annual operating plan approved by the Board at

thestartofeachfinancialyear.

Toensurethatasignificantproportionofanexecutive’stotalremunerationisbasedoncorporate/business

financialperformancethatislinkedtotheCompany’sannualoperatingplan.

Through the part deferral of bonuses into deferred shares this enables incentive pay to help executives

build and maintain meaningful shareholdings and thereby provides a long term focus.

How it operates

in practice

An annual bonus is based on over performance against selected performance measures which are linked

to the Company’s key performance indicators, or the achievement of strategic and/or operational objectives.

Bonus payments are paid following the approval of full year results. Payments are based on salaries at the

time of payment.

Bonus deferral element: 50% of any cash bonus payable is normally awarded in shares and deferred for

two years. Dividends accrue on deferred shares (which are normally structured as nil cost options or

conditional share awards) that vest during the vesting period. Deferred shares are forfeitable for gross

misconduct (dismissal for cause).

The Committee may seek recovery and/or withholding of bonuses paid that are later found to have been

based on performance that was mis-stated or incorrectly calculated, or where the amount of any bonus

may have been reduced or withheld due to reasons of gross misconduct. Recovery and withholding

provisions will apply for a period of three years following payment of any bonus. Detailed provisions are

incorporated into the rules of the various schemes which govern the terms of a bonus payment and/or

the making of any deferred share or conditional award.

Maximum

potential value

CEO: 150% of basic salary.

CFO: 125% of basic salary.

A higher annual bonus limit of 200% of basic salary may apply for new recruits.

Framework

used to assess

performance

Performancemeasureswillbemainlyfinancialmeasures.TheCommitteereservestherighttoselect

othernon-financialtargets(includingthebasisoftheirmeasurement)asappropriateconsideringthe

Company’s strategic objectives for the year ahead.

Thefinancialelementofthebonusmayinclude(butisnotlimitedto)theCompany’skeyperformance

indicators which include:

 Profitbeforetaxorothermeasuresofprofitability

Group average trade working capital to sales ratio expressed as a percentage or other cash flow

indicators

Foranyprofitrelatedmetric,targetswillbesetatthreshold,planandstretchlevelsandtheamount

payableforthresholdperformanceis0%forfinancialtargetsrisingonagraduatedbasisthroughto100%,

becomingpayableatthestretchperformancelevel.Withregardtonon-financialtargets,itisnotalways

practicabletosettargetsonaslidingscaleandsotargetsmaybesetbasedontheachievementofspecific

milestones and/or on a graduated scale.

The Committee will consider the bonus outcome each year based on the Company’s performance against

the measures set at the start of the year. If it considers the quantum to be inconsistent with the Company’s

overall performance during the year it can override the result of the performance test. For the avoidance of

doubt, this can be to zero and bonuses may not exceed the maximum levels detailed above. Any use of

such discretion would be detailed in the Annual Report on Remuneration.

The Committee keeps performance metrics under review on an annual basis to ensure they continue to

remain appropriate and has the discretion to introduce new metrics or remove existing ones and amend

their relative weightings. As a result, the performance metrics and weightings may vary in line with the

Company’sevolvingstrategyduringthelifeofthePolicy.Theprofitrelatedelementofannualbonusshall

not be less than 50% of the overall bonus opportunity.

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Long term incentives

Purpose and link

to Company’s

strategy

The LTIP is the sole long term incentive mechanism for Executive Directors and is intended to align the

interests of the executives and shareholders in growing the value of the Group over the long term.

When granting awards under the LTIP the Committee generally takes into consideration the need to

motivate and retain the Executive Directors and other participants.

How it operates

in practice

Awards are normally structured as either nil cost options or conditional share awards which are eligible

to be granted annually. Options may be exercisable three years from, and within ten years of, the date of

award. Share awards normally vest on the third anniversary of the date of award.

A post vesting holding period of two years will normally apply to annual awards.

Recovery and withholding provisions similar to those described in respect of annual bonus payments

but relating to the vesting of LTIP awards will apply to awards.

Dividends may accrue on shares that vest during the vesting period (and during the post vesting holding

period where awards are structured as nil cost options) and may be paid in cash or shares.

Maximum

potential value

The maximum award limit is set at 250% of basic salary.

Current practice is as follows:

CEO: 200% of basic salary

CFO: 175% of basic salary

Framework

used to assess

performance

Awardsaresubjecttoachievementoffinancial(e.g.EPSandoperatingcashconversion)and/orrelative

TSRperformanceconditions,measuredoveraminimumofthreefinancialyearsbeginningwiththefinancial

year in which the award is made. The Committee also retains flexibility to introduce strategic targets as

a performance measure for a minority of an award.

The threshold vesting level may be up to 25% of maximum, increasing to 100% vesting on a graduated

basis for achieving stretch targets.

For the TSR portion of the 2022 awards, the threshold vesting for achieving median will be 25% of

maximum. For the EPS and operating cash conversion performance conditions applying to the 2022

awards, the threshold vesting level will start from 0%.

In relation to strategic targets, the structure of the target will vary based on the nature of the target set

(i.e. it will not always be practicable to set strategic targets using a graduated scale and so vesting may

takeplaceinfullifspecificcriteriaaremetinfull).

The metrics and their weighting and targets within the LTIP will be reviewed each year.

The Committee will consider the LTIP vesting outcomes for awards based on applying the performance

conditions and, if it considers the level of vesting to be inconsistent with the Company’s overall performance

duringtheperformanceperiod(includingitsunderlyingfinancialperformance),itcanoverridetheresultof

the performance test. For the avoidance of doubt, this can be to zero. Any use of such discretion would be

detailed in the Annual Report on Remuneration.

Share ownership guidelines

Purpose and link

to Company’s

strategy

To align an executive’s interests with those of shareholders and to encourage executives to participate and

share in the long term success of the Group.

How it operates

in practice

Executive Directors are expected to build up a shareholding in the Company that is equal in value to

200% of their basic annual salaries. The guideline will also apply for two years post cessation of

employment such that Executive Directors are expected to hold shares equal to the value of the lower

of the actual shareholding at cessation of employment and the current guideline (200% of salary).

The post cessation guideline only applies to shares vesting under incentive plans from 2022.

Shares vesting from share awards, or transferred pursuant to an exercise of any option, granted under

any share incentive or employee share saving scheme may not be sold (other than to meet a tax liability)

until the above shareholding level has been met. In exceptional circumstances the Committee may allow

the Director to sell some, or all, shares received from a share incentive scheme even if the individual

hasnotmettheshareownershipguidelines,providedtheyaresatisfiedthatshareholderinterestsare

adequately aligned.

The Committee monitors compliance with these guidelines and can make changes to them from time

to time.

Directors’ Remuneration report

continued

106

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Annual Report and Accounts 2023

Non-Executive Chair and Directors’ fees

Purpose and link

to Company’s

strategy

To attract individuals with the relevant skills, knowledge and experience that the Board considers necessary

in order to maintain an optimal mix that ensures the effectiveness of the Board as a whole in carrying out its

duties and responsibilities.

How it operates

in practice

Non-Executive Directors’ fees are determined by the Chair and the Executive Directors, having commitment

and responsibilities of the role.

In the case of the Chair, the fee level is determined by the Committee. As well as taking into consideration

the above factors, the Committee sets the fee at an appropriate level necessary to attract a role holder

qualifiedtoeffectivelyleadtheboardofacompanyofasimilarsizeandprestigeasElementis.

Fees are payable in cash and Non-Executive Directors are not eligible to participate in any pension,

bonus or share incentive schemes.

All Non-Executive Directors are reimbursed for travel and related business expenses reasonably

incurred in performing their duties so that they are fully recompensed on a pre-tax basis for undertaking

Company business.

No individual is allowed to vote on his/her own remuneration.

Maximum

potential value

Fees will be reviewed annually with changes taking effect from 1 January in the following year.

It is the Company’s policy (other than where there is a step change in the time commitment required of

the Non-Executive Directors) that fees paid to the Chair and other Non-Executive Directors are increased

annually in line with the average increase awarded to the UK salaried workforce.

Link between policy, strategy and structure

The Remuneration Policy is principally designed to attract,

motivate and retain the Executive Directors and other members

of the Executive Leadership team (senior management team) to

execute the Company’s corporate and business strategies in order

to deliver the annual operating plan and sustainable year on year

profitablegrowth,aswellastogenerateandpreservevaluefor

shareholders over the longer term, without encouraging excessive

levels of risk taking. The principles and values that underpin the

remuneration strategy are applied on a consistent basis for all

Group employees.

The remuneration structure for Executive Directors is made

upoftwoelements:fixedremuneration(consistingofbasic

salary,benefitsincluding,forexample,non-contributory

health insurance and life assurance, and pension provision),

and variable remuneration (annual bonus scheme and long term

share incentives).

It is Company policy to reward all employees fairly, responsibly and

by reference to local market practices, by providing an appropriate

balancebetweenfixedandvariableremuneration.

Choice of performance measures and

approach to target setting

The performance metrics that are used for annual bonus,

and long term incentive plans are drawn from a suite of Company

KPIsmonitoredbytheBoardthatarecloselylinkedtothefinancial

KPIs on pages 24-25.

Intheannualbonusscheme,thefinancialmeasurescurrently

used are adjusted Group PBT and AWC to sales ratio. Adjusted

Group PBT is a clear measure of the Company’s trading

performanceandAWCtosalesratioencouragesthemostefficient

use of working capital and is how earnings are converted into

cash. These metrics are aligned with the Company’s objectives

and strategy.

Inaddition,non-financialcriteriaalsoformpartofthetargets

set in the bonus scheme and these are based on Company

specificsustainabilityobjectives(e.g.healthandsafety,

DE&I and environment) and/or strategic business objectives

(e.g.relatingtoInnovation,GrowthandEfficiencytargets).

With regard to long term performance targets, EPS is currently

used since it is aligned with the Company’s strategy of

deliveringprofitablegrowthandcreatinglongtermshareholder

returns.Cashconversionisalsousedtoencourageefficient

working practices. Use of relative TSR also further aligns

shareholders and executives. OPM is being introduced to

align to CMD commitments.

Targetsforfinancialmetricsaresetrelativetointernalplanning

expectations after having regard to general economic conditions,

external market data, current and past performance of the

business and any organic or acquisitive growth plans.

Where appropriate, targets are set based on sliding scales.

Only modest rewards are available for delivering performance

at threshold levels or above, with maximum rewards requiring

outperformance of our challenging plans approved at the start

of each year.

The Committee keeps the choice of metrics and targets under

review for both the annual and long term incentive plans each year

to ensure they are appropriate in light of the Company’s current

circumstances. The Committee retains discretion to revise the

choice of metric and weightings within the incentives as detailed

above. Should the Committee make material changes to the

application of the Remuneration Policy from year to year the

Committee would give consideration to an appropriate form

of dialogue with the Company’s major shareholders.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

107

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Annual Report and Accounts 2023

Differences in Executive Remuneration

Policy compared with other employees

The Committee is informed of pay structures across the wider

Group when setting the Remuneration Policy for Executive

Directors. The Committee considers the general basic salary

increase for the broader Group and, in particular the employees

based in the US, UK and Europe, when determining salary

increases for the Executive Directors.

The same principles and values behind the design of remuneration

for the Executive Directors apply to other members of the ELT and

employeesthroughouttherestoftheGroup,withmodificationsto

reflect local market practice and the level of seniority and ability to

influence Group performance. Overall, the Remuneration Policy

for Executive Directors is more heavily weighted towards variable

pay than for other employees. This ensures that there is a clear link

between the value created for shareholders and the remuneration

received by the Executive Directors, given it is the Executive

Directors who are considered to have the greatest potential to

influence shareholder value creation.

The level of variable pay varies by level of employee within the

Groupandisinformedbythespecificresponsibilitiesofeachrole

and local market practice as appropriate.

In 2018, the Board introduced the ability to grant restricted shares

into the new LTIP. The majority of the ELT are based in the US

where it is common market practice to grant restricted shares.

It is considered that the ability to grant restricted shares in tandem

with performance related share awards enables the Company to

compete for the best talent. Where restricted shares are used, the

award levels are generally lower than if performance shares were

granted, since restricted share awards are more valuable to a

recipient given there is no performance requirement attached to

the vesting of the award. Restricted shares will not be granted to

Executive Directors.

How the views of employees are taken

into account

The Board has established a DNED for workforce engagement

as a direct response to the UK Corporate Governance Code,

enabling the workforce voice in Board matters. The role of the

workforce engagement Director is to review and monitor employee

insight informed by engagement activities and employee

engagement surveys. During 2021, global reward principles were

communicated with additional detail on determination of pay,

irrespective of position. The DNED engaged with the workforce

on these principles during 2023, and feedback was sought during

focus groups held. For more information on engaging with the

workforce, please refer to pages 105-107.

Committee discretion with regard to

incentive plans

The Committee will operate the annual bonus plan, Deferred

Share Bonus Plan, LTIP and all employee plans according to their

respective rules and in accordance with the Financial Conduct

Authority’s Listing Rules (‘Listing Rules’) and HMRC rules where

relevant. The Committee retains discretion, consistent with

market practice, in a number of regards to the operation and

administration of these plans. These include the following

(plan limits and performance targets restricted to the descriptions

detailed in the preceding policy table):

Who participates in the plans

The timing of grant of award and/or payment

The size of an award and/or payment

The determination of vesting

Dealing with a change of control (e.g. the timing of testing

performance targets) or restructuring

Determination of a good/bad leaver for incentive plan

purposes based on the rules of each plan and the appropriate

treatment chosen

Adjustments required in certain circumstances (e.g. rights

issues, corporate restructuring and special dividends)

The annual review of performance conditions, including metrics

and weightings, for the annual bonus plan and LTIP The

Committee also retains the ability to adjust the targets

and/or set different measures and alter weightings for the

annual bonus plan and to adjust targets for the LTIP if events

occur (e.g. material divestment of a Group business) which

cause it to determine that the conditions are no longer

appropriate and the amendment is required so that the

conditions achieve their original purpose and are not materially

lessdifficulttosatisfy.TheCommitteehasdiscretiontooverride

incentive pay outcomes in the event that payouts are not

considered reflective of overall Company performance having

applied the performance conditions for the annual bonus and LTIP.

CEO and CFO rewards scenario analysis

The bar charts overleaf illustrate the potential pay opportunities

for Executive Directors under three different scenarios for 2023.

The CEO’s remuneration has been converted into pounds sterling

using the average exchange rate for 2023 ($1.2373:£1.00).

 Fixed:comprisesfixedpay,beingthevalueofsalary,benefits

and pension (based on 2023 Company contributions)

On target: the amount receivable assumes performance in

which 50% of annual bonus is payable and 50% of LTIP

awards vest

Maximum: the maximum amount receivable should all stretch

targets be met and vesting under both the annual bonus

scheme and LTIP is 100%

Maximum with share price growth: in addition, we have

provided an illustration of the maximum outcome assuming

50% share price appreciation for the purpose of the LTIP value

The LTIPs also relate to awards to be made in 2024 rather than

any awards vesting in 2024.

Directors’ Remuneration report

continued

108

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Annual Report and Accounts 2023

CEO

£’000

£1,000k

£2,000k

£3,000k

£4,000k

£5,000k

£6,000k

Maximum

(with share price growth)

MaximumOn targetMinimum

Fixed pay Annual Bonus LTIP

LTIP value with 50% share price growth

£1,181k

£2,582k

£4,045k

£4,882k

100%

43%

24%

32%

41%

31% 26%

50%

28% 23%

CFO

£’000

£500k

£1,000k

£1,500k

£2,000k

£2,500k

Maximum

(with share price growth)

MaximumOn targetMinimum

Fixed pay Annual Bonus LTIP

LTIP value with 50% share price growth

£528k

£1,149k

£1,769k

£2,131k

100%

46%

24%

32%

41%

29%

24%

51%

30%

25%

Recruitment policy

For Executive Director recruitment and/or promotion situations, the Committee will follow the policy outlined below:

Element Policy

Basic salary Basic salary levels will be set in accordance with the Company’s Remuneration Policy, taking into account

the experience and calibre of the individual (e.g. typically around market rates prevalent in companies of

comparable size and complexity) or salary levels may be set below this level (e.g. if the individual was

promoted to the Board). Where it is appropriate to offer a below market rate of pay initially, a series of

increases to the desired salary positioning may be given over the following few years subject to individual

performance and development in the role.

Benefits NewDirectorsmaybeentitledtobenefitssuchaslifeassurance,privatemedicalhealthinsurance,cover

for dental costs, accidental death and disablement, long term disability and provision of either a company

car (for business and personal purposes) or a car allowance, club membership or any other appropriate

benefitastheCommitteereasonablydetermines.

Where necessary, the Committee may approve the payment of reasonable relocation expenses to facilitate

recruitment for a maximum period of 12 months.

Pension Any new Executive Directors will have their pension level set to be aligned with the appropriate wider

workforce rate (currently 8% of salary).

Annual bonus The annual bonus would operate as outlined for current Executive Directors but, where necessary to aid

recruitment, the maximum bonus opportunity is 200% of basic salary for the life of this policy. Bonus will

be pro-rated for the proportion of the year served. Depending on the timing and responsibilities of the

appointment, it may be necessary to set different performance measures and targets initially.

Long term

incentive

Awards under the LTIP will be granted in line with the policy outlined for the current Executive Directors on

an annual basis but, where necessary to aid recruitment, the maximum award is 250% of basic salary for

the life of this policy.

An award may be made shortly after an appointment (subject to the Company not being in a prohibited

period). For an internal hire, existing awards would continue over their original vesting period and remain

subject to their terms as at the date of grant. In addition, if the grant of awards for that individual precedes

hisorherappointmentasaBoardDirectorforthatfinancialyear,theCommittee’spolicywouldinclude

flexibility to top up awards for that year (subject to the overall individual salary limit) based on the Executive

Director’s new salary.

Buyout awards Inthecaseofanexternalhire,ifitisnecessarytobuyoutincentivepayorbenefitarrangementswhich

would be forfeited on leaving the previous employer, this would be provided for, taking into account the

form (cash or shares), timing and expected value (i.e. likelihood of meeting any existing performance

criteria) of the remuneration being forfeited.

Replacement share awards may be granted using the Company’s LTIP (up to the individual limit) or outside

of the LTIP if necessary and as permitted under the Listing Rules.

Interim

appointments

Where a Director is appointed on an interim basis (e.g. to cover a role until a permanent successor is

appointed), the Company may pay additional remuneration to an individual in line with the policy for the role.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

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Annual Report and Accounts 2023

Outside Board appointments

The Company’s policy is to support executives should they wish

to take on an external board appointment, provided that there is

no conflict of interest and the role does not interfere with the

executive’s commitment or duties. If an executive does take on

an external appointment, they may retain any fees paid and will

be restricted generally to only one such external appointment.

Service contracts

Executive Directors’ service contracts contain a termination notice

period not exceeding 12 months.

Name Date of contract

Notice period

Paul Waterman, CEO 6 November 2015 12 months

Ralph Hewins, CFO 27 June 2016 12 months

1 The date of the service contract is not the same as the date of appointment,

which for Paul Waterman was 8 February 2016 and Ralph Hewins

12 September 2016.

Copies of the Executive Directors’ service contracts are available

forinspectionattheCompany’sregisteredofficeduringnormal

business hours and will be available for inspection at the AGM.

Policy on payment for loss of office

Termination payments

The maximum amount payable under both the CEO’s and CFO’s

contractisbasicsalary,benefitsandpensionfor12monthswhile

each serves his notice period. For the Executive Directors, the

terms covering termination were agreed at the date their contracts

were made and both are required to mitigate their loss in the event

oflossofofficebymakingeffortstosecureanewposition.

The Company may pay compensation in lieu of the notice period

of basic salary only, to be paid in monthly instalments (pro-rated

for the actual notice period). This would apply if the Company

terminates his/her contract for any reason other than for cause,

or if he/she serves notice to terminate his/her contract in

12 months’ time.

Payments in lieu of notice to both the CEO and CFO may be

reduced or ceased if either secures a new position. In both cases,

the payments will only be ceased if the salary in a new position

is equal to or more than the salary on termination; if not, the

monthly payments will be reduced by the gross salary earned by

the CEO or CFO in his/her new position each month.

The above summary only addresses contractual rights to

payments in lieu of notice, or during the relevant Director’s notice

period, and may not reflect any settlement or compromise sums

which are separately agreed at the point of termination.

Treatment of incentive plans

Annual bonus plan

If an Executive Director resigns and serves his/her notice period,

the Committee retains discretion to make a pro-rata payment

based on performance. The same applies in certain circumstances

such as if the individual’s employment is terminated on the

grounds of ill health or disability. No bonus is payable for

termination for cause.

In line with the Company’s policy, rules of the annual bonus

scheme incorporate a requirement to defer half of the amount of

bonus vesting for two years in the form of share awards under the

Deferred Share Bonus Plan. In certain ‘good leaver’ circumstances

(e.g. ill health, death), the Committee, acting fairly and reasonably,

may waive deferral.

Deferred share bonus plan

If an Executive Director’s employment is terminated before

a deferred share award vests (after two years), then the awards

would vest in full on the date of leaving unless termination is for

cause, in which case the awards would lapse.

LTIP

As with the annual bonus plan, the Company’s LTIP also includes

a number of discretions in connection with an Executive Director

leavingemployment.Otherthanincertaindefined‘goodleaver’

circumstances, awards lapse on cessation of employment.

Whereanindividualceasesemploymentforoneofthedefined

‘good leaver’ events (i.e. ill health, disability, redundancy within the

meaning of UK legislation or its overseas equivalent, transfer out of

the Group/sale of business or retirement with employer’s consent

and, in the case of the new LTIP, any other reason at the discretion

of the Committee), the award will remain eligible to vest on its

normal vesting date (unless the Committee uses its discretion

to vest the award on the date of cessation of employment), in all

cases subject to a pro-rata reduction to reflect the portion of the

vesting period that has elapsed (unless the Committee determines

otherwise) and the application of the performance condition.

In the event of a death of an Executive Director, the default is

for the award to vest at the date of death unless the Committee

determines otherwise, in which case it will vest at the normal

vesting date with pro-rating and performance conditions applied

as described in other ‘good leaver’ circumstances.

Similar provisions apply in the event of a change of control,

with performance measured up to the date of the relevant event,

and a pro-rata reduction applying unless the Committee

determines otherwise.

It is the Committee’s policy to exercise these discretions in a way

that would be in the best interests of the Company and depending

on the individual circumstances of each case.

Directors’ Remuneration report

continued

110

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Annual Report and Accounts 2023

Payments agreed prior to the effective date of this policy

Any agreements entered in good faith prior to the commencement of the 2022 Remuneration Policy will remain eligible to operate on their

original terms.

Non-Executive Directors’ terms of appointment

Non-Executive Directors are appointed for a three year term, subject to annual re-election by shareholders. For Non-Executive Directors

who have served for nine years or more, they may be appointed for a further year at a time. Each letter of appointment currently provides

that the Director’s appointment can be terminated by the Company on six months’ notice on any grounds without claim for compensation.

Following the 2018 AGM, the letters of appointment of the Non-Executive Directors were amended to 30 days’ notice by either party,

which is the application of the new Remuneration Policy where a limit of up to three months is permitted. All other terms will remain the

same. The Chair’s letter of appointment will remain with a six months’ notice period.

Non-Executive Directors are not eligible to participate in any pension, bonus or share incentive schemes. No individual is allowed to vote

on his/her own remuneration.

The table below provides further details of the letters of appointment that the Non-Executive Directors held with the Company

during 2023.

Name Date of appointment Date of last re-appointment Date of expiry

Non-Executive Director

Dorothee Deuring 1 March 2017 1 March 2023 1 March 2026

Steve Good 20 October 2014 21 October 2023 29 April 2024

John O’Higgins 4 February 2020 4 February 2023 4 February 2026

Trudy Schoolenberg 15 March 2022 n/a 15 March 2025

Christine Soden 1 November 2020 1 November 2023 1 November 2026

Clement Woon 1 December 2022 n/a 1 December 2025

1 Dorothee Deuring and John O’Higgins’ reappointments were approved by the Nomination Committee on 6 December 2022.

2 Steve Good and Christine Soden’s reappointments were approved by the Nomination Committee on 29 September 2023.

Shareholder engagement

The views of shareholders are important to the Committee. Regular dialogue and engagement with the Company’s shareholders is

undertaken. For example, the Committee wrote to its major shareholders and the leading advisory bodies in 2021 with the proposed

changes to the Policy and its operation going forward. In particular, the Committee has introduced a post cessation of employment

share ownership guideline in response to shareholder views, which has applied since 2022.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

111

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Annual Report and Accounts 2023

Annual report on remuneration (‘report’)

ThisreportdetailshowtheCompany’spoliciesandpracticesonDirectors’remunerationwereappliedinrespectofthefinancialyear

ended31December2023andhowtheywillbeappliedinthe2024financialyear.

Remuneration payable to directors for 2023 (audited)

Although the Company reports its results in US dollars, the remainder of this report on remuneration is presented in pounds sterling

because the majority of the Directors are UK based and paid in pounds sterling.

A breakdown of the Directors’ remuneration for the year ended 31 December 2023 is set out in the table below.

£’000 Year

Fixed Performance related

TotalSalary/fees Benefits

Pension Totalfixed Bonus LTIP Other

Total

variable

Executive Directors

Paul Waterman

, CEO 2023 804 106 162 1,072 928 710 42 1,680 2,752

2022 778 85 171 1,034 903 235 42 1,18 0 2,214

Ralph Hewins, CFO 2023 398 28 84 510 383 339 18 740 1,250

2022 381 28 85 494 373 100 18 491 985

Non-Executive

Directors

John O’Higgins, Chair 2023 208 – – 208 – – – – 208

2022 199 – – 199 – – – – 199

Dorothee Deuring 2023 60 – – 60 – – – – 60

2022 54 – – 54 – – – – 54

Steve Good

2023 66 – – 66 – – – – 66

2022 66 – – 66 – – – – 66

Trudy Schoolenberg

2023 65 – – 65 – – – – 65

2022 50 – – 50 – – – – 50

Christine Soden

2023 71 – – 71 – – – – 71

2022 65 – – 65 – – – – 65

Clement Woon 2023 56 – – 56 – – – – 56

2022 4 – – 4 – – – – 4

Former Directors

Anne Hyland

2023 – – – – – – – – –

2022 20 – – 20 – – – – 20

Total 2023 1,728 134 246 2, 108 1,311 1,049 60 2,420 4,002

Total 2022 1,617 113 256 1,986 1,276 335 60 1,671 3,657

1 Paul Waterman is based in the US and paid in US dollars. He received an annual salary of $995k (2022: $964k). His pension comprises a salary supplement

andemployercontributionstodefinedcontributionretirementschemes.Theforeignexchangerateappliedisthe2023averagerateof$1.2373:£1.00

(2022: $1.2392:£1.00).

2  TaxablebenefitsforPaulWatermanconsistofacarallowance(£19,000),privatehealthcare(£23,849),dental,lifeassurance,accidentaldeathanddisablement

coverandlongtermdisabilityinsurance(£31,354),andtaxadvice(£24,246).ThetaxadvicebenefitallowsappropriatetaxfilingstobemadeinboththeUKand

US as a result of Company business travel requirements during 2022/23, which exceeded the normal business expectations agreed on appointment and gave

risetotheneedfordualfilings.TaxablebenefitsforRalphHewinsconsistofacarallowance(£18,000),privatehealthcareandlifeassurance.

3 As required by remuneration reporting regulations, the valuation of Paul Waterman’s US Savings Related Share Option Scheme (SRSOS) award and

Ralph Hewin’s SAYE grant are based on the face value of shares at grant (September 2022), less the exercise price. There are no performance measures

for either the SRSOS or SAYE.

4 Steve Good was appointed SID upon John O’Higgins’ appointment as Chair until 15 March 2022. He is also Chair of the Remuneration Committee.

5 Trudy Schoolenberg was appointed a NED on 15 March 2022 and assumed the role of SID at the conclusion of the 2022 AGM held on 26 April 2022.

6 Christine Soden is the DNED for workforce engagement. She is also Chair of the Audit Committee.

7 Anne Hyland stepped down from the Board on 26 April 2022.

Directors’ Remuneration report

continued

112

Elementis plc

Annual Report and Accounts 2023

Determination of annual bonus outcome for performance in 2023 (audited)

This section shows the performance targets set in respect of the 2023 annual bonus scheme and the level of performance achieved.

Full details of the bonus assessment for the Executive Directors is set out below. The bonus targets were set prior to the start of the

financialyearbasedonthecontinuingoperationsoftheCompany(i.e.excludingChromium).Therangeoftargetsweresettobesimilarly

challenging to those set in prior years having had regard to both internal planning and prevailing market conditions. The PBT targets for

2023 were lower than 2022 as a result of excluding Chromium post its sale but were no more or less challenging when they were set

than in prior years. The total bonuses payable based on the performance achieved are 74% of maximum for the CEO and CFO. The

Committee was comfortable with the bonus earned in the context of the performance delivered and did not consider it necessary to use

discretion in relation to the bonus out-turn. Accordingly, and in line with the Policy, 50% of the bonus payable will be deferred over shares

which will be released to the Director after two years and which are forfeitable for gross misconduct.

Full year bonus

Relative

weighting of

performance

conditions

2023 bonus plan targets

Actual

result

Percentage

of maximum

Percentage of maximum

bonus earned

Percentage of

salary earned

Threshold Plan Stretch

Paul

Waterman

CEO

Ralph

Hewins

CFO

Paul

Waterman

CEO

Ralph

Hewins

CFO

Maximum 100% 100% 150% 125%

PBT ($m) 50% 6 4.1 71.2 78.3 84.5 50% 50% 50% 75% 62.5%

AWC to sales

(%) 20% 24.3 22.3 20.3 25.1 0% 0% 0% 0% 0%

Non-financial 30% n/a n/a n/a 24/30 24% 24% 24% 36% 30%

Total full year 100% 74% 74% 111% 92.5%

In relation to the targets, 0% is payable at the threshold performance levels, 50% at plan and 100% at the stretch performance level.

SetoutbelowisasummaryoftheCommittee’sassessmentofthechallenging2023non-financialtargets.Theobjectiveswere

categorisedintotwocategories:(1)sustainabilitypriorities(15%weighting)and(2)Innovation,GrowthandEfficiency(15%weighting).

Strategic Report Financial Statements Shareholder InformationCorporate Governance

113

Elementis plc

Annual Report and Accounts 2023

2023 bonus assessment for CEO and CFO: Non-financial targets

Measure Performance indicator Achievements

Summary

scoring

Sustainability objectives

Safety, compliance,

and risk management

Focus on maintaining and

strengthening responsible

workplace practices through

plant based safety engagement

Recordable injuries:

Threshold 9; Target 7; Stretch 5

Plant safety engagement;

Threshold 75% engagement

minimum 2 activities/employee

per quarter; Maximum 75%

engagement 4 activities/

employee per quarter

Recordable injuries: 4

Safety engagement: Weighted average of

3.8 = 90% of maximum

4.75% / 5%

Diversity, Equity and Inclusion

Continue to build organisational

capability through actions that

increase employee engagement

and create a more diverse,

equitable and inclusive organisation

Gender diversity: Increase

Senior Leadership female

representation towards

2025 goal of 40%

Ethnic diversity: diverse

workforces throughout the

organisation

DE&I Engagement Index

Progress DE&I Council

lead initiatives

Improved gender diversity in senior population

from 34% to 37%, making progress towards

40% goal; overall gender diversity improved

from 24% to 27%

US ethnic diversity maintained at 26%

Culture of inclusion index launched

scoring 3.9/5

Further embedded Women in Leadership

programme, launched Women Engineers

in Elementis, Gallup training on Inclusion

and Engagement

4% / 5%

Environmental

Continue to demonstrate clear

progress towards achieving our

2030 goals through implementation

ofkeyenergyefficiencyand

environmental projects, and

continue to put actions in place to

minimise environmental tier 2 and 3

incidents. Prepare for regulatory

and best practice driven changes

(e.g. corporate disclosure, net zero

transition plan, setting a SBT)

Overall GHG emissions

2030 target progress

 Scope3dataverification

Progress on carbon footprint

and life cycle analysis

Absolute GHG emissions reduced by

6.7% versus 2022

2 out of 4 met but all 4 declined vs 2022 due

to product mix and India plant start up

 ObtainingverificationofourScope3datafor

thefirsttimefor2023andcompletedFLAG

(Forest, Land Agriculture) emissions screening

across all Scopes

Product carbon footprints were calculated (for

talc products) and full environmental life-cycle

analysis (“LCA”) was commenced for a range

of Personal Care products (due in April 2024)

3% / 5%

Strategic objectives

Innovation and Growth

Pipeline of new products in place to

be launched in 2024/2025 to ensure

innovation revenue contribution

on track for 17% of total by 2025,

from 2022 actual of 13.3%

Underpin future revenue growth

through continuing to maintain

a healthy NBO pipeline leading

to >50m NBO delivery in 2024

and 2025

Innovation revenue

contribution

New product launches

NBO revenue in 2023

Growth of NBO pipeline

Innovation grew from 13.3% to 14.3% of sales

12 new products launched vs target of 15 with

pipeline for 15 in 2024

$51m of NBO revenue delivered in 2023 with

pipeline growing to $363m from $291m in 2022

3.25% / 5%

Strategy

Set out ‘Post Chromium’ direction

and goals in 2025-2030 strategy

work, gaining Board alignment with

clear implementation roadmap.

2025-2030 Strategy

progressed with

Board alignment

Execution of CMD

Board fully engaged in strategy development

process in readiness for H1 2024 approval

CMD well received with high level of attendance

and engagement

4% / 5%

Talc recovery plan

Deliver2023OperatingProfit,

improved margin and cost savings

versus 2022

 2023OperatingProfit

Margin improvement

Performance Specialties

synergies

The target was $11m and was exceeded

with$14mofOperatingProfit

Operating Margins 10.2% versus 0% in 2022

supported by lower costs versus 2022

Further revenue synergies of $5.7m

5% / 5%

Key to summary scoring

Achieved in full or predominantly achieved

Partially achieved Not achieved

Directors’ Remuneration report

continued

114

Elementis plc

Annual Report and Accounts 2023

Directors’ share based awards

Determination of 2021 LTIP awards (audited)

Under the 2021 award, the performance is assessed against EPS growth, relative TSR and cash conversion performance metrics,

as summarised below.

The EPS growth and relative TSR threshold targets were partially met. However, the average operating cash conversion target was not

met. Overall this has resulted in 54.7% of the award vesting. The Committee considers this to be in line with underlying performance.

In determining vesting, the Committee considered:

ROCE (including goodwill) over the performance period which increased from 5.5% to 9.0% in challenging market conditions and as

suchtheCommitteeconfirmedtheformulaicoutcome

The potential for windfall gains and given the share price used to determine the number of shares included in awards in

February 2021 was £1.2550, which was consistent with the share price in February 2020 shortly before the impact of the

COVID-19,theCommitteeconcludedthatthevalueonvestingofthe2020awardsdidnotbenefitfromwindfallgains.

Accordingly, the Committee did not use any discretion in connection with the 2021 award.

Performance metric Weighting

Threshold

target

Threshold

payout

Maximum

target

Elementis

achievement Payout

EPS

33.3% 8.4 cents per share 0% 10.9 cents

per share

10.82 cents

per share

Above threshold

32.3%

Three year operating

cash conversion

33.3% 85% 0% 95% 77%

Below threshold

Relative TSR vs

FTSE All-Share Index

33.3% Median 3.85% Upper

quartile

Above threshold 22.44%

1 As disclosed in last year’s Directors’ Remuneration Report , the targets were restated to exclude earnings from Chromium in connection with the sale of the

business. The range of targets were reduced to reflect the forecast earnings expected from Chromium at the time the targets were set so as to ensure that the

restated target was no more or less challenging than when they were originally set. Accordingly, the threshold target was adjusted from 10.0 cps to 8.4 cps and

the maximum from 13.0 cps to 10.9 cps.

Based on this performance assessment, the table below illustrates the value receivable under the 2021 Awards. Any shares vesting will

be subject to a two year holding period.

Award holder

Number of

awards

granted

Payout

(% of

maximum)

Number of

due to vest

Value from

share price

increase

Value of

dividend

equivalents

2,3

Total value

vesting

Paul Waterman 1,789,362 54.7% 590,483 £0 £0 £710,056

Ralph Hewins 515,214 54.7% 281,856 £0 £0 £338,932

1 There was no share price appreciation from the date of grant (£1.2550) to the three-month average share price to 31 December 2023 (£1.2025).

2 Value of dividend equivalents estimated based on dividends until 31 December 2023.

3 Value of shares based on a three-month average share price of £1.2025 to 31 December 2023. This value will be restated next year based on the actual

share price on the date of vesting.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

115

Elementis plc

Annual Report and Accounts 2023

Annual LTIP awards granted in the year (audited)

On 03 April 2023, LTIP awards were granted in line with the Remuneration Policy. The CEO was granted an award over shares to the

value of 200% of salary and 175% of salary for the CFO. Share awards will ordinarily vest after three years, with any shares vesting

(other than those sold to meet associated tax liabilities) subject to a two year holding requirement.

Details of the main terms of the 2023 LTIP awards are summarised in the table below. In addition, the Committee retain the discretion

to reduce the number of shares on vesting should it be considered appropriate to do so (e.g. in the event that there was perceived

windfall gain).

Award holder Type of share award Grant date

Number of

awards

Face value of

award at grant

(£000s)

Paul Waterman Nil cost (restricted

stock unit)

03.04.2023 1,350,978 £1,607,664

Ralph Hewins Nil cost option 03.04.2023 584,349 £695,959

The awards are subject to EPS, TSR and operating cash conversion performance conditions (equally weighted), each measured over the

three years to 31 December 2025 as shown in the table below.

Performance metric Weighting Threshold target

Threshold

payout Stretch target

Stretch

payout

End of the

performance

period

EPS 33.3% 2025 EPS of

13 cents per share

0% 2025 EPS of

17 cents per share

100% 31.12.2025

Cash conversion 33.3% 80% 0% 100% 100% 31.12.2025

Relative TSR vs FTSE All-Share Index 33.3% Median 25% Upper quartile 100% 31.12.2025

1 The share price used to determine the number of awards granted was £1.19, based on the share price on the day prior to grant (3 April 2023).

2 The vesting of the award is also subject to a return on capital employed underpin which requires the Company to consider whether the return generated is in line

with the Board’s expectations and if not, to reduce the vesting to a more appropriate level. The Committee also retains discretion to reduce the number of shares

on vesting should it be considered appropriate, including in the event of a perceived windfall gain.

3  Therationalefortherangeoffinancialtargetssetwasdetailedinlastyear’sDirectors’RemunerationReport.

Sourcing shares for our share plans

Employee share plans comply with the Investment Association’s guidelines on dilution, which provide that overall issuance of shares

under all plans should not exceed an amount equivalent to 10% of the Company’s issued share capital over any ten year period,

with a further limitation of 5% in any ten year period on discretionary plans. Based on the number of awards that remain outstanding

as at the year end, the Company’s headroom for all plans is 4.53% and for discretionary plans is 3.84% of issued share capital.

Directors’ Remuneration report

continued

116

Elementis plc

Annual Report and Accounts 2023

Directors’ scheme interests (audited)

The interests of the persons who were Directors during the year in the issued shares of the Company were:

Interest

type

Grant

date

Option price

(p) 01.01.23

Scheme interests

31.12. 23

Vested but

unexercised

share options

Granted

during 2023

Exercised

during 2023

Lapsed

during 2023

Executive

Directors

Paul Waterman LTIP

07.04.2020 – 2,037,577 – 225,967 1,811,610 – –

LTIP

06.04.2021 – 1,079,362 – – – 1,079,362 –

DSBP

05.03.2022 – 490,383 – – – 490,383 –

LTIP

04.04.2022 – 1,236,244 – – – 1,236,244 –

SRSOS

20.09.2022 92.31 45,584 – – – 45,584 –

DSBP

08.03.2023 – – 374,376 – – 374,376 –

LTIP

03.04.2023 – – 1,350,978 – – 1,350,978 –

Total scheme

interests

4,889,150 1,725,354 225,967 1,811,610 4,576,927 Nil

Ralph Hewins DSBP

07.03.2017 – 7,14 0 – – – 7,140 7,140

07.03.2017 – 92,262 – – – 92,262 92,262

07.03.2017 – 17,458 – – – 17,458 17,458

DSBP

05.03.2018 – 73,123 – – – 73,123 73,123

DSBP

06.03.2019 – 48,865 – – – 48,865 48,865

DSBP

05.03.2020 – 76,266 – – – 76,266 76,266

LTIP

07.04.2020 – 862,469 – 95,647 766,822 – –

LTIP

06.04.2021 – 515,214 – – – 515,214 –

DSBP

05.03.2022 – 213,105 – – – 213,10 5 –

LTIP

04.04.2022 – 559,656 – – – 559,656 –

SAYE

20.09.2022 88.00 20,454 – – – 20,454 –

DSBP

08.03.2023 – – 147,833 – – 147,833 –

LTIP

03.04.2023 – – 584,349 – – 584,349 –

Total scheme

interests

2,486,012 732,182 95,647 766,822 2,355,725 Nil

Notes

1 LTIP awards are subject to performance conditions. The same relative TSR performance conditions apply in respect of all awards. The EPS target for the 2020

awards required annual growth of 3% to 12%. The EPS target for the 2021 awards is based on FY23 EPS of between 8.4 cents and 10.9 cents, for the 2022

awards is based on FY24 EPS of between 10.9 cents and 14.7 cents. The operating cash conversion performance conditions for the 2021 and 2022 awards is

based on three year targets between 85% and 95%. These awards ordinarily vest on the third anniversary of the grant date. Full detail of the vesting conditions

for the 2023 awards are set out on page 97.

2 Conditional share award under the Deferred Share Bonus Plan (“DSBP”). Structured as restricted stock units for Paul Waterman and nil cost options for

Ralph Hewins. The 2020 DBSP vested on 5 March 2022. Paul Waterman’s tax liability crystallised on vesting which he self funded and he therefore retained

the 188,130 shares. Ralph Hewin’s 2020 DSBP Award has vested but has not yet been exercised. For DSBP awards granted in March 2020, the share price

at date of grant was 98.95 pence. The face value of awards at grant were £186,155 and £75,466 for Paul Waterman and Ralph Hewins respectively. Both

Executive Directors recommended and the Committee agreed that no bonus be payable in respect of 2020, therefore no DSBP awards were granted in 2021.

For DSBP awards granted in March 2022, the share price at date of grant was 103.8 pence with the face value of awards at grant of £509,018 and £221,204

for Paul Waterman and Ralph Hewins respectively. For DSBP awards granted in March 2023, the share price at date of grant (7 April 2020) was 126.1 pence

with the face value of awards at grant of £472,088 and £186,418 for Paul Waterman and Ralph Hewins respectively.

3 Replacement Awards structured as nil cost options made under standalone arrangements that borrow terms from the LTIP as amended. In line with the

remuneration forfeited on leaving his former employer, the 2017 Award did not have performance conditions, but shares were required to be held for two years.

4 Replacement Awards structured as nil cost options made under standalone arrangements that borrow terms from the DSBP as amended.

5 Grant under the Elementis plc US Savings Related Share Option Scheme 2018. The options granted in 2020 became exercisable from 15 September 2022

with an option price of 63.11 pence per share. The options are made pursuant to a two year savings contract and the exercise price is based on the share price

at close of business on 15 September 2020, being the date of the grant. A 2022 grant was made on 20 September 2022 with an option price of 92.31 pence

per share.

6 Options held under the UK SAYE scheme. This is a savings based share option scheme that is not subject to performance conditions. The 2018 grant vested on

1 January 2022 and 10,981 shares lapsed on 1 July 2022 due to the shares being underwater. A 2022 grant was made on 20 September 2022 with an option

priceof88.00pencepershare.FurtherdetailsonthisschemeisshowninNote26totheconsolidatedfinancialstatementsonpage178.

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117

Elementis plc

Annual Report and Accounts 2023

Directors’ share interest (audited)

The interests of the Directors (including any connected persons) during the year (and from the year end to 6 March 2024) in the issued

shares of the Company were:

01.01.23

Acquired

during 2023

Disposed

during 2023 31.12.23

Shareholding

level met as at

31.12. 23

Executive Directors

Paul Waterman 1,116,78 0 151,701 – 1,268,481 Yes

Ralph Hewins 92,995 50,775 – 143,770 No

Non-Executive Directors

Dorothee Deuring 26,250 – – 26,250 n/a

Steve Good 62,500 20,000 – 82,500 n/a

John O’Higgins 125,600 – – 125,600 n/a

Trudy Schoolenberg – 30,000 – 30,000 n/a

Christine Soden 30,000 – – 30,000 n/a

Clement Woon 20,000 10,000 – 30,000 n/a

1 As per the Policy, Executive Directors are expected to build up a shareholding that is equal in value to 200% of their basic annual salaries. Share awards vesting

over time will contribute to meeting the shareholder requirement.

The market price of ordinary shares at 31 December 2023 was £1.278 pence (2022: £1.20 pence) and the range during 2023 was

£0.9775 pence to £1.296 pence (2022: £0.88 pence to £1.47 pence).

As at 31 December 2023, the trustee of the Company’s Employee Share Ownership Trust (“ESOT”) held 1,458,404 shares

(2022:258,404).AsExecutiveDirectorsandaspotentialbeneficiariesundertheESOT,PaulWatermanandRalphHewinsare

deemed to have an interest in any shares that become held in the ESOT.

Asat6March2024,nopersonwhowasthenaDirectorhadanyinterestinanyderivativeorotherfinancialinstrumentrelatingtothe

Company’s shares and, so far as the Company is aware, none of their connected persons had such an interest. There was no other

change, so far as the Company is aware, in the relevant interests of other Directors or their connected persons.

Other than their service contracts, letters of appointment and letters of indemnity with the Company, none of the Directors had an interest

inanycontractofsignificanceinrelationtothebusinessoftheCompanyoritssubsidiariesatanytimeduringthefinancialyear.

Directors’ retirement benefits (audited)

ThetablebelowshowsthebreakdownoftheretirementbenefitsoftheExecutiveDirectors,comprisingemployercontributionstodefined

contribution plans and salary supplements paid in cash.

Paul Waterman received a salary supplement and participated in US contractual retirement schemes. Further detail can be found in the

Policy. The amount shown in the table below represents employer matching contributions, and both this and the salary supplement are

included in the Directors’ emoluments table shown on page 112.

RalphHewinsreceivedasalarysupplementinlieuofanyotherretirementbenefit.Theamountreceivedisshowninthetablebelowandin

the Directors’ emoluments table.

Definedcontributionplans Salary supplement

2023

£’000

2022

£’000

2023

£’000

2022

£’000

Paul Waterman 37 40 125 131

Ralph Hewins n/a n/a 84 85

Note: The pensions received were consistent with the Company’s remuneration policy at up to a total of 21% of salary and for Paul Waterman included contributions

tohisUSpensionarrangements(whichincludedataxqualified401kplanandanon-qualifiedplan).

Payments to past directors or payments for loss of office (audited)

Therewerenopaymentsinthefinancialyear.

Directors’ Remuneration report

continued

118

Elementis plc

Annual Report and Accounts 2023

Total shareholder return performance and change in CEO’s pay

The graph below illustrates the Company’s total shareholder return for the ten years ended 31 December 2023, relative to the FTSE 250

Index, along with a table illustrating the change in CEO pay over the corresponding period. The table also details the payouts for the

annual bonus scheme and LTIP.

As the Company’s shares are denominated and listed in pence, the graph below looks at the total return to 31 December 2023 of

£100 invested in Elementis on 31 December 2013 compared with that of the total return of £100 invested in the FTSE 250 Index.

This index was selected for the purpose of providing a relative comparison of performance because the Company is a member of it.

TSR performance since 2013 (rebased to 100)

100

150

200

Elementis plc FTSE 250 index (excl. Investment Trusts)

2013

2014 2015

2016 2017 2018 2019 2020 2021 2022

2023

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

CEO pay (total remuneration – £’000s) 1,573 763 1,553

2,539 1,229 1,114 1,007 1,946 2,214 2,752

Annual bonus payout (% of maximum) 50% 0% 27. 5% 93.0% 35.0% 17.3% 0% 93% 75% 74%

LTIP vesting (% of maximum) 65% 0% 91.2%

91.4%

0% 0% 0% 0% 11.1% 54.7%

1 Includes remuneration for Paul Waterman and David Dutro for the period in which each was CEO during 2016.

2 Relates to Paul Waterman’s buy-out awards which vested in March 2017.

3 Relates to Paul Waterman’s buy-out awards vesting in March 2018.

CEO to all-employee pay ratio

Whilst Elementis is not required to publish a CEO to all-employee pay ratio given it has less than 250 UK employees, voluntary disclosure

of the pay ratio is included below. In line with the relevant legislation, the analysis has been completed using Option A (i.e. actual total

remuneration earned has been used as the basis for comparison). The reference date for the analysis was 31 December 2023.

Whilstthisisonlybasedupon80UKemployees,thereisamixoffactorybasedemployees(c.75%)andcorporateHeadOffice

employees. Option A was used as it was deemed the most accurate and prevalent amongst recent FTSE 250 disclosures. The 2023

ratioisgreaterthantheequivalent2022figureduetothehigherratioofvariablepaywithintheCEO’soverallcompensationasaresult

of the vesting of the 2021 LTIP award. Circa 10% of UK employees are eligible for LTIP. The ratio is consistent with the pay, reward

and progression policies for the Company’s UK employees taken as a whole. The pay ratio illustrates the greater leverage in Director

packages versus the wider workforce in that in years where Elementis performs strongly against its performance targets, the ratio is

generally higher.

CEO pay ratio 2019 2020 2021 2022 2023

Method A A A A A

CEOsinglefigure £1,114 £1,007 £1,946 £2,214 £2,752

Upper quartile 15 14 23 24 31

Median 21 19 34 40 52

Lower quartile 25 23 42 49 67

ThesalaryandtotalpayfortheindividualsidentifiedattheLowerquartile,MedianandUpperquartilepositionsin2023aresetoutbelow:

2023 Salary Total pay

Upper quartile individual £72,509 £90,125

Median individual £48,346 £52,843

Lower quartile individual £37,476 £41,214

Strategic Report Financial Statements Shareholder InformationCorporate Governance

119

Elementis plc

Annual Report and Accounts 2023

Relative importance of spend on pay

The table below shows the total remuneration paid across the Group together with the total dividends paid in respect of 2023 and the

precedingfinancialyear.

£m 2023 2022 Change

Remuneration paid to all employees

89.2 91.3 -2.4%

Total dividends paid in the year 0 0 0%

1 SeeNote8totheconsolidatedfinancialstatements.Theamountsfor2023and2022havebeenconvertedfromdollarsintopoundssterlingusingtheaverage

USD/GBP exchange rates for those years.

Percentage change in the remuneration of the directors (unaudited)

The table below shows the change in the Directors’ pay and the corresponding change of these elements across all UK employees within

the Group from 2022 to 2023.

Average percentage change

2019-20

Average percentage change

2020-21

Average percentage change

2021-22

Average percentage change

2022-23

Salary

Taxable

benefits

Annual

bonus Salary

Taxable

benefits

Annual

bonus Salary

Taxable

benefits

Annual

bonus Salary

Taxable

benefits

Annual

bonus

CEO

1,2,3,4

2.0% 8.5% 0% 2% 26% 100% 3% -4% -17% 3.2% 24.7% 2.7%

CFO

1,2

2.2% 2.8% 0% 2% 4% 100% 3% 4% -16% 4.5% 0% 2.7%

John O’Higgins

n/a – – 131% – – 86% – – 4.5% – –

Dorothee Deuring 2.2% – – 2% – – 3% – – 10.5% – –

Steve Good

2.2% – – 7% – – 3% – – -0.2% – –

Trudy Schoolenberg

– – – – – – – – – 31.9% – –

Christine Soden

n/a – – 512% – – 14% – – 9.3% – –

Clement Woon

– – – – – – – – – 4.5% – –

Employees

-9.4% – – 11.1% – – 1.8% – -12% 0.4% – -20.7%

Former Directors

Sandra Boss

2.8% – – – – – – – – – – –

Andrew Duff

2.2% – – -31% – – – – – – – –

Nick Salmon

2.2% – – – – – – – – – – –

Anne Hyland

2.2% – – 2% – – -67% – – – – –

1 All percentages are based on converting relevant local currencies into pounds sterling using the average rates for the respective year.

2 The Executive Directors recommended and the Committee agreed that no bonuses should be payable in relation to 2020 performance.

3 The2019-20yearonyearchangeintheCEO’sbenefitsaredrivenbyincreasedprivatemedicalinsurancesubscriptionasaresultofachangeincoverage,

whilechangesinemployeesalary,benefitsandbonusaredrivenbychangestotheemployeepopulationandmovementsinexchangerates.

4 TheactualbenefitscostforFY2022wereeffectivelyunderstatedinFY2022byapproximately£15kduetothetimingofthemedicalpayments.Thishasbeen

corrected for 2023 and accounts for the majority of the 26% increase. FX rates and changes in costs due to age and salary also impact 2023.

5 Andrew Duff stepped down as Chair on 1 September 2021, with John O’Higgins assuming the role.

6 Steve Good assumed the interim role of SID on 1 September 2021 until April 2022.

7 Trudy Schoolenberg was appointed NED on 15 March 2022 and assumed the role of SID in April 2022.

8 Christine Soden joined the Board as NED and DNED for workforce engagement on 1 November 2020.

9 Clement Woon was appointed NED on 1 December 2022.

10 Sandra Boss was appointed as DNED for workforce engagement in October 2019 and retired from the Board in April 2020.

11 Nick Salmon retired from the Board in April 2020.

12 Anne Hyland retired from the Board in April 2022.

Directors’ Remuneration report

continued

120

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Annual Report and Accounts 2023

Statement of shareholding voting

The resolutions to approve the 2021 Directors’ Remuneration Policy and the 2022 Directors’ Remuneration report were passed by a poll

at the Company’s 2022 and 2023 AGM respectively. Set out in the table below are the votes cast by proxy in respect of these resolutions.

Votes for % for Votes against % against

Votes

withheld

2022 Directors’ Remuneration report (2023 AGM) 394,335,860 82.73 82,320,489 17. 27 16,032

2021 Directors’ Remuneration Policy (2022 AGM) 460,112,80 4 96.99 14,282,696 3.01 42,939

1  Voteswithheldarenotincludedinthefinalfiguresastheyarenotrecognisedasavoteinlaw.

Other information about the Committee’s membership and operation

Committee composition

The Chair and members of the Committee are shown on pages 74 to 76, together with their biographical information. Four meetings were

held during 2023 and the attendance of Committee members is shown on page 96.

The Chair, CEO and other Non-Executive Directors who are not members of the Committee have a standing invite to attend, and the

CFO and CHRO also attend meetings by invitation, as appropriate. The Executive Directors are not present when their own remuneration

arrangements are discussed or, if they are, they do not participate in the decision making process.

External advisor

Korn Ferry was appointed as external independent advisor to the Committee in 2017 following a competitive tender process.

During 2023, Korn Ferry provided advice to the Committee in relation to emerging market practice and benchmarking. Through a

separate advisory team to the remuneration advisory team, Korn Ferry provided other human capital related services to the Nomination

Committee.TheCommitteeisthereforesatisfiedthattheadvicereceivedwasobjectiveandindependent.KornFerryisamemberofthe

Remuneration Consultants Group and abides by the voluntary code of conduct of that body, which is designed to ensure objective and

independent advice is given to remuneration committees. More information regarding the role of Korn Ferry in advising the Nomination

Committee can be found on page 85. Fees paid to Korn Ferry for remuneration advisory services in 2023 were £31,047 (excluding VAT)

and were charged on a time and materials basis.

Terms of reference

A full description of the Committee’s terms of reference is available on the Company’s website at www.elementis.com.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

121

Elementis plc

Annual Report and Accounts 2023

Activities during the year

The Committee operated in line with its Terms of Reference during the year, setting the pay for the Executive Directors and wider senior

leadership team, having oversight of pay across the organisation and setting the Board Chair’s fee. The Committee considered the

following at its meetings during 2023:

Committee meeting dates Agenda items

February 2023 2020 LTIP performance outcomes

2022 Executive Director bonus awards

2023 LTIP targets/performance conditions and delegated authority to grant the 2023 awards

Adjustments to 2021 and 2022 LTIP performance targets as a result of the sale of Chromium

ELT salary review and bonus payments

CEO pay ratio calculations

 ApprovaloffinaldraftofDirectors’Remunerationreport

July 2023 Market update and Remuneration Policy review discussion proposals

Employee share schemes

October 2023 Application of Remuneration Policy in 2024

Update on 2023 performance against annual bonus targets and 2021 LTIP

Workforce engagement

December 2023 Institutional investor and proxy agency update

Update on workforce pay reviews

2024 salary reviews for Paul Waterman and Ralph Hewins

Chair’s fee review

Update on 2023 performance against annual bonus targets and 2021 LTIP

Gender pay gap review

 Globalbenefitsreview

Committee terms of reference

Outsideoftheabovemeetingdates,theCommitteeconsideredandconfirmedoperationalmattersinappropriateforums

(e.g. the Executive Directors’ annual bonus targets, and granting of the 2023 LTIP awards).

Evaluation, training and development

On an annual basis, the Committee’s effectiveness is reviewed as part of the evaluation of the Board. Following the evaluation

last year, there were no major issues to report. During 2023, Committee members were updated on the latest developments

onexecutiveremunerationandallmembersreceivedbriefingsfromtheGroupGeneralCounsel&CompanySecretaryandthe

Committee’s remuneration advisers throughout the year, to keep them updated on topical matters and developments relating to

executive remuneration.

Auditable sections of the Directors’ remuneration report

The sections of the Annual Report on Remuneration that are required to be audited by law are as follows: Remuneration payable to

Directorsfor2023andDirectors’retirementbenefits;andtablesheadedAnnualLTIPawardsgrantedintheyear,Directors’scheme

interests,Directors’shareinterestsandDirectors’retirementbenefits.

Approved by the Board on 6 March 2024

Steve Good

Chair, Remuneration Committee

Directors’ Remuneration report

continued

122

Elementis plc

Annual Report and Accounts 2023

Directors’ report

The Directors present their report together with the Annual Report

and Accounts, together with the audited consolidated financial

statements of the Company, and the Group, for the year ended

31 December 2023.

The Directors’ report is set out on pages 123 to 125, together with

the information required to be disclosed (referred to below) which

is incorporated by reference. The Company, in accordance with

Section 414(C)(11) of the Companies Act 2006, has chosen to set

out certain information required to be included in the Directors’

report in the Strategic report. Such information is identified in the

table below. The Governance report is set out on pages 73 to 126.

Information from the consolidated financial statements referred to

in this Directors’ report is incorporated by reference.

Disclosure of information under Listing Rule 9.8.4

39 Carbon emissions, energy consumption and energy efficiency

77 Corporate Governance Framework

112 Directors’ remuneration

117 Directors’ share interests

94 Directors’ training and development

48 Employee equality, diversity and inclusion

49 Employee engagement

29 Environmental matters

63 Financial instruments and financial risk management

16 Innovation, Growth and Efficiency strategy

97 Long term incentive schemes

73 Membership of Board

29 Modern Slavery Statement

54 Non-financial and sustainability information

67 Principal risks

55 Results and dividend

28 Section 172(1) statement

26 Stakeholder engagement

126 Statement of Directors’ responsibilities

29 Sustainability

72 Viability and going concern

The Company has chosen, in accordance with section 414C(11) of

the Companies Act 2006, and as noted in this Directors’ report, to

include certain matters in its Strategic report that would otherwise

be required to be disclosed in this Directors’ report. The Strategic

report can be found on pages 1 to 72 and includes an indication

of future likely developments in the Company, details of important

events and the Company’s business model and strategic progress.

Directors

Directors and their interests

The biographical details of the Directors of the Company who

held office during the year, and up to the date of the signing of

the financial statements, are set out on pages 123 and 125.

Appointment and replacement of directors

The Articles of Association (the ‘Articles’) give the Directors power

to appoint and replace Directors. Under the terms of reference of

the Nomination Committee, appointments are recommended by

the Nomination Committee for approval by the Board. In line with

the UK Corporate Governance Code, the Articles also require

all Directors to retire and submit themselves for election at each

AGM except for any Director appointed by the Board after

the notice of the AGM has been given. The service contracts

of the Executive Directors and letters of appointment of the

Non-Executive Directors are available for inspection at the

Company’s registered office.

Amendment of articles

Amendments to the Articles may be made by way of special

resolution, in accordance with the Companies Act 2006.

The most recent amendments to the Articles were approved

at the AGM held on 30 April 2019.

Directors’ powers

The business of the Company is managed by the Board, which

may exercise all the powers of the Company, subject to the

Articles, the Companies Act 2006 and any special resolution of

the Company. The exercise of certain powers, including in relation

to the issuing or buying back of shares, requires authority from

the Company’s shareholders. The Articles may only be amended

by special resolution of the Company at a general meeting of

its shareholders.

Directors’ conflicts of interest

Ralph Hewins is in receipt of a conflict authorisation from the

Company in respect of him acting as a trustee of the Elementis

Group Pension Scheme. The conflict authorisation enables

Ralph Hewins to continue to act as a trustee, notwithstanding that

this role could give rise to a situation in which there is a conflict of

interest. The Board considers that it is appropriate for the trustees

of the UK pension scheme to benefit from the financial expertise

of the CFO and that his contribution at trustees’ meetings

demonstrates the Board’s commitment to supporting the UK

pension scheme. The Board’s conflict authorisation is subject to

annual review and, under the terms of the conflict authorisation,

reciprocal provisions have been put in place with a view to

safeguarding information that is confidential to the Group,

as well as to the trustees. Were a conflict of interest to arise,

Ralph Hewins is required to excuse himself from reading the

relevant papers and absent himself from participating in relevant

discussions. Procedures are in place to ensure compliance with

the Companies Act 2006. These procedures have been complied

with during the year. Details of any new conflicts or potential

conflict matters are submitted to the Board for consideration

and, where appropriate, are approved. Authorised conflicts and

potential conflict matters are reviewed on an annual basis and

more frequently where required.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

123

Elementis plc

Annual Report and Accounts 2023

Directors’ report

continued

Directors’ insurance and indemnities

In addition to the indemnities granted by the Company to Directors

in respect of the liabilities incurred as a result of their office

(which are qualifying third party indemnity provisions under the

Companies Act 2006), a directors’ and officers’ liability insurance

policy is maintained throughout the year. Neither the indemnity

nor the insurance provides cover in the event that a Director

has proven to have acted dishonestly or fraudulently. Similar

arrangements also exist for directors of Group subsidiary entities.

Directors’ share interests

The Directors’ interests in the ordinary shares and options of the

Company can be found within the Directors’ Remuneration report

on pages 117 and 118.

Share capital

As at 31 December 2023, the Company’s issued share capital

was 587,824,987 ordinary shares, with a nominal value of 5 pence

each. Each issued share carries a voting right of one vote per

share. All of the Company’s issued shares are fully paid up and

rank equally in all respects. The rights attached to the shares, in

addition to those conferred on their holders by law, are set out in

the Company’s Articles. From time to time, the ESOT holds shares

in the Company for the purposes of various share incentive plans

and the rights attached to them are exercised by independent

trustees, who may take into account any recommendation by the

Company. As at 31 December 2023, the ESOT held 1,458,404

shares in the Company (2022: 258,404). A dividend waiver is in

place in respect of all shares that may become held by the ESOT.

Further details of the authorised and issued share capital during the

financial year are provided in Note 17 to the accounts on page 162.

Voting rights

In a general meeting of Elementis plc, the provisions of the

Companies Act 2006 apply in relation to voting rights, subject

to the provisions of the Articles and to any special rights or

restrictions as to voting attached to any class of shares in

Elementis plc (of which there are none). Shareholders are entitled

to attend and vote at any general meeting of the Company and

a poll will be held on every resolution. Every member present in

person or by proxy has, upon a poll, one vote for every share held.

In the case of joint holders of a share, the vote of the senior who

tenders a vote, whether in person or by proxy, shall be accepted

to the exclusion of the votes of the other joint holders and, for this

purpose, seniority shall be determined by the order in which the

names stand in the Register of Members in respect of the joint

holding. Full details of the deadlines for exercising voting rights in

respect of the resolutions to be considered at the AGM to be held on

30 April 2024 will be set out in the Notice of Annual General Meeting.

Authority to purchase own shares

The Company did not purchase any of its ordinary shares

(2022: nil) during the year. All of the Company’s 5p ordinary shares

held in treasury were issued in satisfaction of awards under the

Company’s share-based incentive plans during the year and no

shares were held in treasury at 31 December 2023 (2022: nil).

A special resolution will be proposed at the forthcoming AGM to

renew the Company’s authority to purchase its own shares in the

market up to a limit of 20% of its issued ordinary share capital. The

maximum and minimum prices will be stated in the resolution at

the date of the AGM. The Directors believe that it is advantageous

for the Company to have this flexibility to make market purchases

of its own shares. The Directors may consider holding repurchased

shares pursuant to the authority conferred by this resolution as

treasury shares. This will give the Company the ability to reissue

treasury shares quickly and cost effectively, and will provide

the Company with additional flexibility in the management of its

capital base. Any issues of treasury shares for the purposes of the

Company’s employee share schemes will be made within the 20%

anti-dilution limit set by The Investment Association. The Directors

will only exercise this authority if they are satisfied that a purchase

would result in an increase in expected earnings per share and

would be in the interests of shareholders generally.

Employee share schemes

The Company operates a number of employee share plans,

details of which are set out in Note 26 to the consolidated financial

statements and on page 117 of the Directors’ Remuneration report.

Substantial shareholders

In accordance with the Disclosure Guidance and Transparency

Rules (DTR), as at 31 December 2023, the interests in voting

rights over the issued share capital of the Company had

been notified.

Information provided to the Company pursuant to the DTRs

is published on a regulatory information service and on the

Company’s website.

Ordinary shares

% of issued share

capital

Franklin Templeton 57,618,174 9.80

Columbia Threadneedle 42,850,084 7. 29

Fidelity International 35,084,692 5.97

Soros Fund Management 34,411,898 5.85

Vanguard Group 27,236,692 4.63

Between 31 December 2023 and 15 February 2024 (being the

latest available register date), the Company has been notified of

the following changes:

Franklin Templeton increased their shareholding to

58,477,949 or 9.95%;

Columbia Threadneedle reduced their shareholding to

42,508,599 or 7.23%; and

Fidelity International increased their shareholding to

38,121,330 or 6.49%.

Employees

Employment policies and equal opportunities

Group policies seek to create a workplace that has an open

atmosphere of trust, honesty and respect. Harassment or

discrimination of any kind based on race, colour, religion, gender,

age, national origin, citizenship, mental or physical disabilities,

sexual orientation, veteran status, or any other similarly protected

status is not tolerated. This principle applies to all aspects of

employment, including recruitment and selection, training,

development, promotion, and retirement. Employees are free

to join a trade union and participate in collective bargaining

arrangements. It is also a Group policy to reasonably

accommodate applicants and employees who have a disability,

where practicable, and to provide training, career development

and promotion, as appropriate. It is Group policy not to

discriminate on the basis of any unlawful criteria and its practices

include prohibition on the use of child or forced labour. Elementis

plc supports the wider fundamental human rights of its employees

worldwide, as well as those of our customers and suppliers,

and further details are set out in the People and Responsible

business sections on pages 45 to 53.

124

Elementis plc

Annual Report and Accounts 2023

Employee communications and involvement

The Company is committed to employee involvement throughout

the business. Employees are kept informed of the performance

and strategy of the Group via email. Videoconference calls are

held by the CEO to employees worldwide and these serve as an

informal forum for employees to ask topical questions about the

Group. Further information can be found on page 26.

Engagement with other stakeholders

Details of engagement with other stakeholders and information on

how the Directors have had regard to their interests in the context

of principal decisions taken by the Board during the year are set

out on pages 26 to 27.

R&D activities

Innovation is a core strategic priority. Our innovation expertise

and capability is focused on delivering products that address our

customers’ needs. As at 31 December 2023, over 100 employees

were engaged in global R&D activities. For further information on

our approach to innovation, please refer to pages 18 and 19.

During the year ended 31 December 2023, costs relating to

R&D activities were $16m (2022: $16m).

Additional information

Going Concern and Viability Statement

The Directors consider that the Group and the Company have

adequate resources to remain in operation for the foreseeable

future and have therefore continued to adopt the going concern

basis in preparing the financial statements. The UK Corporate

Governance Code requires the Directors to assess and report on

the prospects of the Group over a longer period. The full viability

statement and associated explanations are set out on page 72.

Audit information

Each Director of the Company on 6 March 2024, the date this

Directors’ report was approved, confirms that so far as they

are aware, there is no relevant audit information of which the

Company’s auditors, Deloitte LLP, are unaware and that they

have taken all the steps that they ought to have taken as

a Director to make themselves aware of any relevant audit

information and to establish that the Company’s auditors

are aware of that information.

Auditors

Following recommendation by the Audit Committee, resolutions

to re-appoint Deloitte LLP as auditors and to authorise the

Audit Committee to fix their remuneration will be proposed at

the forthcoming AGM. The remuneration of the auditors for the

year ended 31 December 2023 is fully disclosed in Note 7 to

the financial statements on page 155.

Annual general meeting

The 2024 AGM will be held at 10.00am on Wednesday 30 April

2024 at the offices of Allen & Overy LLP, One Bishops Square,

London, E1 6AD. Details of the resolutions to be proposed at the

AGM are set out in the Notice of AGM, which has been sent to

shareholders and is available on the Elementis corporate website:

www.elementis.com.

Significant agreements – change of control

There are a number of significant agreements which the Company

is party to that take effect, alter or terminate in the event of change

of control of the Company. The Company is a guarantor under the

Group’s $100m and €143m long term loans, and $375m revolving

credit facility and, in the event of a change of control, any lender

among the facility syndicate, of which there are 13 with

commitments ranging from $10m to $93m, may withdraw from

the facility and that lender’s participation in any loans drawn down

are required to be repaid.

The rules of the Company’s various share incentive schemes set

out the consequences of a change of control of the Company on

the rights of the participants under those schemes. Under the

rules of the respective schemes, participants would generally be

able to exercise their options on a change of control, provided

that the relevant performance conditions have been satisfied

and, where relevant, options are not exchanged for new options

granted by an acquiring company.

In the event of a takeover or other change of control (usually

excluding an internal reorganisation), outstanding awards

under the Group’s incentive plans vest and become exercisable

(including DSBP cash awards and LTIP awards), to the extent any

performance conditions (if applicable) have been met, and subject

to time pro-rating (if applicable) unless determined otherwise by

the Board in its discretion, in accordance with the rules of the

plans. In certain circumstances, the Board may decide (with the

agreement of the acquiring company) that awards will instead be

cancelled in exchange for equivalent awards over shares in the

acquiring company.

Political donations

The Group made no political donations during the year (2022: $nil).

Branches

As a global Group, Elementis’ interests and activities are held or

operated through subsidiaries, branches, joint arrangements or

associates which are established in, and subject to the laws and

regulations of, many different jurisdictions.

Other information

Information about the Group’s financial risk management and

exposure to financial market risks are set out in Note 23 to

the financial statements on pages 168-172.

Events after the balance sheet date

On 6 March 2024, Elementis entered into an agreement to sell

its former Chromium manufacturing site at Eaglescliffe to Flacks

Group for negative purchase consideration of £11.5m ($14.5m).

Completion of the transaction is conditional on regulatory approval.

There were no other significant events after the balance sheet date.

By order of the Board:

Anna Lawrence

Group General Counsel

& Company Secretary

6 March 2024

Strategic Report Financial Statements Shareholder InformationCorporate Governance

125

Elementis plc

Annual Report and Accounts 2023

Directors’ responsibilities

Statement of directors’ responsibilities

in respect of the annual report and

financial statements

Company law requires the Directors to prepare financial

statements for each financial year. Under that law, the Directors

are required to prepare the Group financial statements in

accordance with UK-adopted international accounting standards

in conformity with the requirements of the Companies Act

2006 and International Financial Reporting Standards (IFRSs)

as adopted by the UK. The financial statements also comply with

the IFRSs as issued by the International Accounting Standards

Board (IASB).

The Directors have also chosen to prepare the parent company

financial statements in accordance with United Kingdom Generally

Accepted Practice (United Kingdom Accounting Standards and

applicable law) including Financial Reporting Standard 101

Reduced Disclosure Framework – Disclosure exemptions

from EU-adopted IFRS for qualifying entities (FRS 101).

Under company law, the Directors must not approve the financial

statements unless they are satisfied that they give a true and

fair view of the state of affairs of the Group and Company and

of the profit or loss for that period.

In preparing the parent company financial statements,

the Directors are required to:

select suitable accounting policies and then apply

them consistently;

make judgements and accounting estimates that are

reasonable and prudent;

state whether applicable UK Accounting Standards have

been followed, subject to any material departures disclosed

and explained in the financial statements; and

prepare the financial statements on the going concern basis

unless it is appropriate to presume that the Company will

not continue in business.

In preparing the Group financial statements, International

Accounting Standard 1 requires that the Directors:

properly select and apply accounting policies;

present information, including accounting policies,

in a manner that provides relevant, reliable, comparable

and understandable information;

provide additional disclosures when compliance with the

specific requirements in IFRSs are insufficient to enable

users to understand the impact of particular transactions,

other events and conditions on the entity’s financial position

and financial performance; and

make an assessment of the Company’s ability to continue

as a going concern.

The Directors are responsible for keeping adequate accounting

records that are sufficient to show and explain the Company’s

transactions and disclose with reasonable accuracy at any time

the financial position of the Company and enable them to ensure

that the financial statements comply with the Companies Act

2006. The Directors are also responsible for safeguarding the

assets of the Company and hence for taking reasonable steps

for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors are also

responsible for preparing a Strategic report, Directors’ report,

Directors’ Remuneration report and Corporate Governance

statement which comply with that law and regulations.

The Directors are responsible for the maintenance and integrity

of the corporate and financial information included on the

Company’s website. Legislation in the UK governing the

preparation and dissemination of financial statements may

differ from legislation in other jurisdictions.

Directors’ responsibility statement

Each of the Directors, who are appointed at the date of approval

of this report, confirm that, to the best of their knowledge:

the financial statements, which have been prepared in

accordance with the relevant financial reporting framework,

give a true and fair view of the assets, liabilities, financial

position and profit or loss of the Company and the

undertakings included in the consolidation taken as a whole;

the Strategic report includes a fair review of the development

and performance of the business and the position of the

Company and the undertakings included in the consolidation

taken as a whole, together with a description of the principal

risks and uncertainties that they face; and

the Annual Report and financial statements, taken as

a whole, are fair, balanced and understandable, and provide

the information necessary for shareholders to assess

the Company’s position, performance, business model

and strategy.

This responsibility statement was approved by the Board of

Directors on 6 March 2024 and is signed on its behalf by:

Paul Waterman Ralph Hewins

CEO CFO

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Independent Auditor’s report to the members

of Elementis plc

Report on the audit of the

financial statements

1. Opinion

In our opinion:

the financial statements of Elementis plc (the ‘parent

company’) and its subsidiaries (the ‘group’) give a true

and fair view of the state of the group’s and of the parent

company’s affairs as at 31 December 2023 and of the

group’s profit for the year then ended;

the group financial statements have been properly prepared

in accordance with United Kingdom adopted international

accounting standards and International Financial Reporting

Standards (IFRSs) as issued by the International Accounting

Standards Board (IASB);

the parent company financial statements have been properly

prepared in accordance with United Kingdom Generally

Accepted Accounting Practice, including Financial Reporting

Standard 101 “Reduced Disclosure Framework”; and

the financial statements have been prepared in accordance

with the requirements of the Companies Act 2006.

We have audited the financial statements which comprise:

the consolidated income statement;

the consolidated statement of comprehensive income;

the consolidated and parent company balance sheets;

the consolidated and parent company statements of changes

in equity;

the consolidated cash flow statement;

the consolidated financial statement related notes 1 to 32; and

the parent company financial statement related notes 1 to 11.

The financial reporting framework that has been applied in

the preparation of the group financial statements is applicable

law and United Kingdom adopted international accounting

standards and IFRSs as issued by the IASB. The financial

reporting framework that has been applied in the preparation of

the parent company financial statements is applicable law and

United Kingdom Accounting Standards, including FRS 101

“Reduced Disclosure Framework” (United Kingdom Generally

Accepted Accounting Practice).

2. Basis for opinion

We conducted our audit in accordance with International

Standards on Auditing (UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards are further described in

the auditor’s responsibilities for the audit of the financial statements

section of our report.

We are independent of the group and the parent company in

accordance with the ethical requirements that are relevant to our

audit of the financial statements in the UK, including the Financial

Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to

listed public interest entities, and we have fulfilled our other ethical

responsibilities in accordance with these requirements. The

non-audit services provided to the group and parent company

for the year are disclosed in note 7 to the financial statements.

We confirm that we have not provided any non-audit services

prohibited by the FRC’s Ethical Standard to the group or the

parent company.

We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our opinion.

3. Summary of our audit approach

Key audit

matters

The key audit matters that we identified in the

current year were:

Adjusting items – transformation costs; and

Revenue recognition, including cut off.

Within this report, key audit matters are identified

as follows:

Newly identified

Increased level of risk

Similar level of risk

Materiality The materiality that we used for the group

financial statements was $3.7 million (2022:

$3.8 million). Materiality was based on 5% of

adjusted profit before tax from all operations

(“adjusted PBT”) (2022: 5% of adjusted profit

before tax). See section 6.1 for more details.

Scoping We have performed full scope audits or audits of

specified account balances of four components

which contribute 83% of the group’s revenue,

90% of the group’s profit before tax and 80%

of the group’s net assets.

Significant

changes in

our approach

In the current year, we reduced the scope of

work previously performed in speciality

operations in China.

In the previous year we identified a key audit

matter relating to impairment of goodwill of the

Talc CGU. As this was fully impaired in 2022,

we have no longer identified a fraud risk or key

audit matter in relation to this balance. We have

pinpointed our fraud risk in the current year to

transformation costs classified within adjusting

items, which has significantly increased

by $21.3m in the year due to the group’s

commitment to restructuring plans in 2023.

We have also identified a new key audit matter

in this area.

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Independent Auditor’s report to the members of Elementis plc

continued

4. Conclusions relating to going concern

In auditing the financial statements, we have concluded that the

directors’ use of the going concern basis of accounting in the

preparation of the financial statements is appropriate.

Our evaluation of the directors’ assessment of the group’s and

parent company’s ability to continue to adopt the going concern

basis of accounting, included:

evaluating the group’s financing facilities including the nature of

facilities, repayment terms and covenants set out on page 72 of

the annual report;

recalculating and assessing of the amount of forecast headroom

on the loan covenants to testing dates;

evaluating the reverse stress test prepared by management and

performing a sensitivity analysis to consider specific scenarios,

including a reduction in revenue and associated profits;

challenged management on the assumptions used in the cash

flow model used to prepare the going concern forecast,

including with consideration to current macro-economic factors

such as the inflationary environment and international conflicts.

This includes testing of clerical accuracy of the model,

assessment of the historical accuracy of forecasts prepared

by management and reviewing the balance sheet for items

which could potentially result in a cash outflow; and

evaluating management’s going concern disclosures in the

financial statements.

Based on the work we have performed, we have not identified

any material uncertainties relating to events or conditions that,

individually or collectively, may cast significant doubt on the

group’s and parent company’s ability to continue as a going

concern for a period of at least twelve months from when the

financial statements are authorised for issue.

In relation to the reporting on how the group has applied the UK

Corporate Governance Code, we have nothing material to add

or draw attention to in relation to the directors’ statement in the

financial statements about whether the directors considered it

appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with

respect to going concern are described in the relevant sections

of this report.

5. Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements

of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we

identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the

audit; and directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon,

and we do not provide a separate opinion on these matters.

5.1. Adjusting Items – transformation costs

Key audit matter

description

The group have recorded total adjusting items of $26.1 million (2022: $133.7 million). Adjusting items are a key

determinant of the groups adjusted operating profit.

We have identified new adjusting items in the year which has increased the risk associated with the accuracy

and classification of the adjusting items. The group has undertaken a group-wide restructuring programme

branded “Fit for Future”. This was announced internally to the group in September 2023 and was announced

externally at the capital markets day in November 2023. Management has recognised a current year provision

of $25.4 million in line with IAS 37 Provisions, Contingent Liabilities and Contingent Assets, classified as an

adjusting item under FRC guidance. There is an element of estimation in determining the associated future

costs, and judgement in identifying which costs are appropriate to recognise within the provision. Therefore,

we identified a key audit matter in this area.

See note 5 to the financial statements for further details of adjusting items.

How the scope of our

audit responded to

the key audit matter

Our procedures included:

obtaining an understanding of the relevant controls over identification and evaluation of adjusting items;

testing a sample of adjusting items related to transformation costs by agreeing to source documentation and

underlying financial records to evaluate their nature and amounts; and

verifying the nature of the costs included in the “Fit for Future” restructuring provision, to assessed whether

they meet the recognition requirements in IAS 37, and are appropriate to be classified as adjusting items in

line with FRC guidance.

Key observations We completed our planned audit procedures with no exceptions noted. We are satisfied that the valuation of and

classification as an adjusting item of the restructuring provision is appropriate.

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5.2. Revenue recognition, including cut-off

Key audit matter

description

During the year the group recognised revenue from all operations of $713.4m (2022: $736.4m) and recorded a

cut off adjustment of $6.6m (2022: $5.8m).

At the year end, manual adjustments are made by management for goods which have been despatched but

where, under the terms of sale, the control of the goods has yet to pass to the customer; this is done because

the group’s systems record revenue on despatch. Management determines the point at which the performance

obligation has been fulfilled based on different shipping terms and estimates the delivery times to the point at

which control passes to the customer. The group trades globally and a change in the number of days estimated

for shipments to transfer to the customer can have a material impact on the cut off adjustment. This remains a

higher risk for the audit and an area of significant audit effort and therefore we determined it a key audit matter.

The accounting policy is described in note 1 where this is also included as a critical accounting judgement.

This area of judgement areas is also referred to within the Audit Committee report on page 90.

How the scope of our

audit responded to

the key audit matter

Our procedures included:

testing the relevant controls over each significant class of revenue transaction;

assessing the commercial arrangements, to determine the correct point of revenue recognition for different

shipping arrangements and agreements with customers;

testing a sample of revenue transactions at each component and obtaining support for appropriate revenue

recognition including shipping documentation and payments received;

selecting a sample of international shipments made pre-year end for time periods varying by destination port

and therefore transit time for shipments and agreeing these to invoice, shipment and order details and goods

receipt notes;

developing an understanding of how current global supply chain disruption could impact the timing of delivery

of group’s products to its customers;

assessing management’s assumptions used in their cut off calculation for reasonableness and consistency

with consideration to macroeconomic factors and substantively testing of international shipments both pre and

post year-end; and

testing a sample of post year end credit notes raised to determine if revenue was inappropriately recognised

in 2023.

Key observations We completed our planned audit procedures with no exceptions noted. We are satisfied that management has

completed appropriate cut off adjustments at the year end to take into account those sales where control has

not transferred.

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6. Our application of materiality

6.1. Materiality

We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of

a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and

in evaluating the results of our work.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Group financial statements Parent company financial statements

Materiality $3.7 million (2022: $3.8 million) $1.2 million (2022: $1.1 million)

Basis for

determining

materiality

The materiality that we used for the group financial

statements was $3.7 million (2022: $3.8 million) which

was determined on the basis of 5% (2022: 5%) of

adjusted profit before tax from all operations without

adjustment for amortisation of purchased intangibles

arising on acquisition.

A factor of 3% of net assets (2022: 3%) was used

capped to an appropriate component materiality

of 50% (2022: 50%) of group materiality.

Rationale for the

benchmark applied

We have considered the users of the financial

statements when selecting the appropriate benchmark.

Earnings based metrics tend to be of more interest

to the shareholders, analyst and investor-based

communities. Adjusted profit before tax is a suitable

measurement for profit orientated entities.

We have used net assets in determining materiality

as we believe this is an appropriate basis for materiality

as it reflects the nature of the parent company

as a holding company and its contribution to the

group performance.

Adjusted PBT

Group materiality

Group materiality $3.7m

Adjusted PBT

$74.2m

Component materiality range $1.2m to $1.5m

Audit Committee reporting threshold $0.184m

6.2. Performance materiality

We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected

misstatements exceed the materiality for the financial statements as a whole.

Group financial statements Parent company financial statements

Performance

materiality

70% (2022: 60%) of group materiality 70% (2022: 60%) of parent company materiality

Basis and rationale

for determining

performance

materiality

In determining performance materiality, we considered our past experience of the group and our risk

assessment, including our assessment of the group’s overall control environment and low number of

misstatements identified in the prior year.

6.3. Error reporting threshold

We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of $184,000 (2022: $191,000),

as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the

Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.

Independent Auditor’s report to the members of Elementis plc

continued

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7. An overview of the scope of our audit

7.1. Identification and scoping of components

There are four components in scope for the 2023 year-end audit

(2022: seven including two Chromium entities which have been

disposed in 2023), of which the first three below are significant

to the group:

the Talc operation in Netherlands and Finland;

the specialty products operations in the US;

the specialty products operations in the UK; and

the specialty products operations in India.

All of these locations were subject to full scope audits or audits

of specified accounts balances.

We have increased the number of specified account balances in

the scope of work performed on speciality product operations in

India because of the manufacturing plant becoming operational.

Given the appropriate coverage achieved in the current year,

we reduced the scope of work previously performed on operations

in China to review procedures.

Each component was set a specific component materiality,

considering its relative size and any component specific risk

factors such as internal control findings and history of error.

Our audit work on the four components was executed at levels

of performance materiality applicable to each individual entity

which were lower than group materiality and ranged from

$1.2 million to $1.5 million (2022: $1.1 million to $1.5 million).

The in-scope locations represent the principal business units

within the group’s operating divisions and account for 83%

(2022: 95%) of the group’s revenue, 90% (2022: 95%) of the

group’s profit before tax and 80% (2022: 96%) of the group’s

net assets.

At the parent entity level we also tested the consolidation process

and carried out analytical procedures to confirm our conclusion

that there were no significant risks of material misstatement of the

aggregated financial information of the remaining components not

subject to full scope audit or audit of specified account balances.

The parent company is located in the UK and is audited directly by

the group audit team.

7.2. Our consideration of the control environment

Our audit for the prior period identified a number of general

IT control deficiencies primarily related to the user access and

segregation of duties within the IT systems specific to the Talc

operations. We note that the control deficiencies remain in 2023

but acknowledge that this business will adopt the wider group’s

ERP system in 2024 as outlined in the CEO statement on Page 11.

With involvement of our IT specialists, we have tested general

IT controls over the key IT systems. We have obtained an

understanding of the relevant internal controls over financial

reporting and management’s review controls of key estimates

and judgements. We have tested relevant controls over revenue

recognition cycle. Based on our testing, we have not relied on

controls and we therefore adopted a fully substantive approach.

As described in the internal controls and risk management

section of pages 90 and 91, the Audit Committee will continue

to oversee the actions taken to monitor and improve the internal

control environment.

Profit before tax

Full audit scope 87%

Specificed audit procedures 3%

Review at group level 10%

Net assets

Full audit scope 77%

Specificed audit procedures 3%

Review at group level 20%

Revenue

Full audit scope

83%

Review at group level

17%

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7.3. Our consideration of climate-related risks

Climate change and the transition to a low carbon economy

(“climate change”) were considered in our audit where they have

the potential to directly or indirectly impact key judgements and

estimates within the financial statements. The group continues to

develop its assessment of the potential impacts of climate change,

as explained in the Chief Executive Officer’s review within the

strategic report on page 11. Management has disclosed their

climate risk considerations on page 141 primarily in relation to the

key judgements and estimates in the assessment of the carrying

value of non-current assets and environmental provisions. The key

judgements and estimates included in the financial statements

incorporate actions and strategies, to the extent they have been

approved and can be reliably estimated in accordance with the

group’s accounting policies. With the involvement of our

Environmental, Social and Governance (“ESG”) specialists,

we assessed this disclosure by performing inquiries with

management and independent industry research, and we did not

identify any climate related material risks of misstatement. We also

considered whether information included in the climate related

disclosures in the Annual Report were materially consistent with

our understanding of the business and the financial statements.

7.4. Working with other auditors

The group audit was conducted by the UK group audit team with

exception of Talc operations in Netherlands and Finland where

work was performed by local Deloitte member firms under the

direction and supervision of the UK group audit team. Component

auditors were assigned to perform audit procedures in line with

the scoping of the respective components within their jurisdiction.

Further work was performed at a group level over the

consolidation and components not in scope. Dedicated

members of the group audit team were assigned to each

component to facilitate an effective and consistent approach

to component oversight.

The planned programme which we designed as part of our

involvement in the component auditor’s work was delivered over

the course of the group audit. The extent of our involvement

which commenced from the planning phase included:

Setting the scope of the component auditor and assessment

of the component auditor’s independence.

Designing the audit procedures for all significant risks to be

addressed by the component auditors and issuing group audit

instructions detailing the nature and form of the reporting

required by the group engagement team.

Holding frequent calls and meetings (including in person

meetings) between the group and component teams.

Providing direction on enquiries made by the component

auditors through online and telephone conversations.

Reviewing of each component auditor’s engagement file

by a senior member of the group audit team.

Attending local component audit close meetings virtually

or in-person.

Visiting components in the Netherlands and Finland sites.

8. Other information

The other information comprises the information included in the

annual report, other than the financial statements and our auditor’s

report thereon. The directors are responsible for the other

information contained within the annual report.

Our opinion on the financial statements does not cover the other

information and, except to the extent otherwise explicitly stated in

our report, we do not express any form of assurance conclusion

thereon.

Our responsibility is to read the other information and, in doing so,

consider whether the other information is materially inconsistent with

the financial statements, or our knowledge obtained in the course of

the audit, or otherwise appears to be materially misstated.

If we identify such material inconsistencies or apparent material

misstatements, we are required to determine whether this

gives rise to a material misstatement in the financial statements

themselves. If, based on the work we have performed,

we conclude that there is a material misstatement of this

other information, we are required to report that fact.

We have nothing to report in this regard.

9. Responsibilities of directors

As explained more fully in the directors’ responsibilities statement,

the directors are responsible for the preparation of the financial

statements and for being satisfied that they give a true and fair

view, and for such internal control as the directors determine is

necessary to enable the preparation of financial statements that

are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible

for assessing the group’s and the parent company’s ability to

continue as a going concern, disclosing as applicable, matters

related to going concern and using the going concern basis of

accounting unless the directors either intend to liquidate the group

or the parent company or to cease operations, or have no realistic

alternative but to do so.

10. Auditor’s responsibilities for the

audit of the financial statements

Our objectives are to obtain reasonable assurance about whether

the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an

auditor’s report that includes our opinion. Reasonable assurance

is a high level of assurance, but is not a guarantee that an audit

conducted in accordance with ISAs (UK) will always detect a

material misstatement when it exists. Misstatements can arise

from fraud or error and are considered material if, individually

or in the aggregate, they could reasonably be expected to

influence the economic decisions of users taken on the basis

of these financial statements.

A further description of our responsibilities for the audit of

the financial statements is located on the FRC’s website at:

www.frc.org.uk/auditorsresponsibilities. This description

forms part of our auditor’s report.

Independent Auditor’s report to the members of Elementis plc

continued

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11. Extent to which the audit was

considered capable of detecting

irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance

with laws and regulations. We design procedures in line with our

responsibilities, outlined above, to detect material misstatements

in respect of irregularities, including fraud. The extent to which our

procedures are capable of detecting irregularities, including fraud

is detailed below.

11.1. Identifying and assessing potential risks related

to irregularities

In identifying and assessing risks of material misstatement in

respect of irregularities, including fraud and noncompliance

with laws and regulations, we considered the following:

the nature of the industry and sector, control environment

and business performance including the design of the group’s

remuneration policies, key drivers for directors’ remuneration,

bonus levels and performance targets;

the group’s own assessment of the risks that irregularities may

occur either as a result of fraud or error;

results of our enquiries of management, internal audit, the

directors and the audit committee about their own identification

and assessment of the risks of irregularities, including those

that are specific to the group’s sector;

any matters we identified having obtained and reviewed

the group’s documentation of their policies and procedures

relating to:

– identifying, evaluating and complying with laws and

regulations and whether they were aware of any instances

of non-compliance;

– detecting and responding to the risks of fraud and whether

they have knowledge of any actual, suspected or alleged

fraud; and

– the internal controls established to mitigate risks of fraud

or non-compliance with laws and regulations;

the matters discussed among the audit engagement team,

including significant component audit teams, and relevant

internal specialists, including tax, valuations, pensions, financial

instruments, ESG, IT and environmental regarding how and

where fraud might occur in the financial statements and any

potential indicators of fraud.

As a result of these procedures, we considered the opportunities

and incentives that may exist within the organisation for fraud and

identified the greatest potential for fraud in transformation costs

adjusting items. In common with all audits under ISAs (UK), we are

also required to perform specific procedures to respond to the risk

of management override.

We also obtained an understanding of the legal and regulatory

frameworks that the group operates in, focusing on provisions

of those laws and regulations that had a direct effect on the

determination of material amounts and disclosures in the financial

statements. The key laws and regulations we considered in this

context include the UK Companies Act, Listing Rules, pensions

legislation and tax legislation and the sector it operates in.

In addition, we considered provisions of other laws and regulations

that do not have a direct effect on the financial statements but

compliance with which may be fundamental to the group’s ability

to operate or to avoid a material penalty which included

environmental regulation.

11.2. Audit response to risks identified

As a result of performing the above, we identified transformation

costs adjusting items as a key audit matter related to the potential

risk of fraud. The key audit matters section of our report explains

the matter in more detail and also describes the specific

procedures we performed in response to that key audit matter.

In addition to the above, our procedures to respond to risks

identified included the following:

reviewing the financial statement disclosures and testing to

supporting documentation to assess compliance with provisions

of relevant laws and regulations described as having a direct

effect on the financial statements;

enquiring of management, the audit committee and in-house legal

counsel concerning actual and potential litigation and claims;

performing analytical procedures to identify any unusual or

unexpected relationships that may indicate risks of material

misstatement due to fraud;

reading minutes of meetings of those charged with governance,

reviewing internal audit reports and reviewing correspondence

with HMRC and environmental regulators; and

in addressing the risk of fraud through management override

of controls, testing the appropriateness of journal entries

and other adjustments; assessing whether the judgements

made in making accounting estimates are indicative of

a potential bias;and evaluating the business rationale of

any significant transactions that are unusual or outside the

normal course of business.

We also communicated relevant identified laws and regulations

and potential fraud risks to all engagement team members

including internal specialists and significant component

audit teams and remained alert to any indications of fraud or

non-compliance with laws and regulations throughout the audit.

Report on other legal and

regulatory requirements

12. Opinions on other matters prescribed

by the Companies Act 2006

In our opinion the part of the directors’ remuneration report to

be audited has been properly prepared in accordance with the

Companies Act 2006.

In our opinion, based on the work undertaken in the course of

the audit:

the information given in the strategic report and the

directors’ report for the financial year for which the financial

statements are prepared is consistent with the financial

statements; and

the strategic report and the directors’ report have been

prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group

and the parent company and their environment obtained in

the course of the audit, we have not identified any material

misstatements in the strategic report or the directors’ report.

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13. Corporate Governance Statement

The Listing Rules require us to review the directors’ statement

in relation to going concern, longer-term viability and that part

of the Corporate Governance Statement relating to the group’s

compliance with the provisions of the UK Corporate Governance

Code specified for our review.

Based on the work undertaken as part of our audit, we have

concluded that each of the following elements of the Corporate

Governance Statement is materially consistent with the financial

statements and our knowledge obtained during the audit:

the directors’ statement with regards to the appropriateness

of adopting the going concern basis of accounting and any

material uncertainties identified set out on page 72;

the directors’ explanation as to its assessment of the

group’s prospects, the period this assessment covers

and why the period is appropriate set out on page 72;

the directors’ statement on fair, balanced and

understandable set out on page 126;

the board’s confirmation that it has carried out a robust

assessment of the emerging and principal risks set out on

page 63;

the section of the annual report that describes the review

of effectiveness of risk management and internal control

systems set out on page 63; and

the section describing the work of the audit committee set

out on page 88.

14. Matters on which we are required to

report by exception

14.1. Adequacy of explanations received and

accounting records

Under the Companies Act 2006 we are required to report to

you if, in our opinion:

we have not received all the information and explanations

we require for our audit; or

adequate accounting records have not been kept by the parent

company, or returns adequate for our audit have not been

received from branches not visited by us; or

the parent company financial statements are not in agreement

with the accounting records and returns.

We have nothing to report in respect of these matters.

14.2. Directors’ remuneration

Under the Companies Act 2006 we are also required to report

if in our opinion certain disclosures of directors’ remuneration

have not been made or the part of the directors’ remuneration

report to be audited is not in agreement with the accounting

records and returns.

We have nothing to report in respect of these matters.

15. Other matters which we are required

to address

15.1. Auditor tenure

Following the recommendation of the audit committee, we were

appointed by the Board on 27 April 2016 to audit the financial

statements for the year ending 31 December 2016 and

subsequent financial periods. The period of total uninterrupted

engagement including previous renewals and reappointments

of the firm is 8 years, covering the years ending 31 December

2016 to 31 December 2023.

15.2. Consistency of the audit report with the additional

report to the audit committee

Our audit opinion is consistent with the additional report to

the audit committee we are required to provide in accordance

with ISAs (UK).

16. Use of our report

This report is made solely to the company’s members, as a body,

in accordance with Chapter 3 of Part 16 of the Companies

Act 2006. Our audit work has been undertaken so that we might

state to the company’s members those matters we are required

to state to them in an auditor’s report and for no other purpose.

To the fullest extent permitted by law, we do not accept or

assume responsibility to anyone other than the company and the

company’s members as a body, for our audit work, for this report,

or for the opinions we have formed.

As required by the Financial Conduct Authority (FCA) Disclosure

Guidance and Transparency Rule (DTR) 4.1.15R – DTR 4.1.18R,

these financial statements will form part of the Electronic Format

Annual Financial Report filed on the National Storage Mechanism

of the FCA in accordance with DTR 4.1.15R – DTR 4.1.18R. This

auditor’s report provides no assurance over whether the Electronic

Format Annual Financial Report has been prepared in compliance

with DTR 4.1.15R – DTR 4.1.18R.

Lee Welham

(Senior statutory auditor)

For and on behalf of Deloitte LLP

Statutory Auditor

Cambridge, United Kingdom

06/03/2024

Independent Auditor’s report to the members of Elementis plc

continued

134

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Annual Report and Accounts 2023

Consolidated income statement

For the year ended 31 December 2023

		2023	2022
	Note	$m	$m
Revenue	2	713.4	736.4
Cost of sales		(429.1)	(437.5)
Gross profit		284.3	298.9
Distribution costs		(108.7)	(125.0)
Administrative expenses		(116.7)	(215.7)
Operating profit/(loss)	2	58.9	(41.8)
Other expenses 1	25	(2.3)	(1.3)
Finance income	3	4.4	9.9
Finance costs	4	(21.3)	(21.6)
Profit/(loss) before income tax		39.7	(54.8)
Tax	6	(11.5)	(7.8)
Profit/(loss) from continuing operations	7	28.2	(62.6)
(Loss)/profit from discontinued operations	32	(1.7)	11.5
Profit/(loss) for the year		26.5	(51.1)
Attributable to:
Equity holders of the parent		26.5	(51.1)
Earnings per share
From continuing operations
Basic earnings/(loss) (cents)	9	4.8	(10.7)
Diluted earnings/(loss) (cents)	9	4.7	(10.7)
From continuing and discontinued operations
Basic earnings/(loss) (cents)	9	4.5	(8.8)
Diluted earnings/(loss) (cents)	9	4.4	(8.8)

1 Other expenses comprise administration expenses for the Group’s pension schemes.

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Annual Report and Accounts 2023

Consolidated statement of comprehensive income

For the year ended 31 December 2023

		2023	2022
	Note	$m	$m
Profit/(loss) for the year		26.5	(51.1)
Other comprehensive income:
Items that will not be reclassified subsequently to profit and loss:
Remeasurement of retirement benefit obligations	25	12.3	(18.5)
Deferred tax associated with retirement benefit obligations		(2.8)	5.3
Items relating to discontinued operations, net of tax	25	–	0.3
Items that may be reclassified subsequently to profit and loss:
Exchange differences on translation of foreign operations	22	(5.1)	(100.9)
Effective portion of change in fair value of net investment hedge	22	14.8	46.2
Tax associated with change in fair value of net investment hedge		(0.1)	(2.8)
Tax associated with changes in cash flow hedges		(0.6)	0.8
Recycling of deferred foreign exchange losses on disposal		9.3	–
Effective portion of changes in fair value of cash flow hedges	22	12.7	(2.6)
Fair value of cash flow hedges transferred to income statement	22	(6.3)	1.6
Exchange differences on translation of share options reserves		0.2	(0.9)
Other comprehensive income/(loss)		34.4	(71.5)
Total comprehensive income/(loss) for the year		60.9	(122.6)
Attributable to:
Equity holders of the parent		60.9	(122.6)

136

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Annual Report and Accounts 2023

		2023	2022
		31 December	31 December
	Note	$m	$m
Non-current assets
Goodwill and other intangible assets	10	650.6	660.2
Property, plant and equipment	11	423.6	386.4
Tax recoverable	30	20.0	17.5
Financial assets	21	6.0	1.3
Deferred tax assets	16	19.6	24.8
Net retirement benefit surplus	25	42.1	26.4
Total non-current assets		1,161.9	1,116.6
Current assets
Inventories	12	163.3	182.0
Trade and other receivables	13	101.8	94.9
Financial assets	21	7.4	10.7
Current tax assets		11.2	7.0
Cash and cash equivalents	20	65.8	54.9
Total current assets		349.5	349.5
Assets classified as held for sale	32	–	160.9
Total assets		1,511.4	1,627.0
Current liabilities
Bank overdrafts and loans	19	–	(2.7)
Trade and other payables	14	(117.9)	(135.4)
Financial liabilities	21	–	(3.3)
Current tax liabilities		(13.6)	(20.2)
Lease liabilities	24	(5.9)	(6.1)
Provisions	15	(21.5)	(5.8)
Total current liabilities		(158.9)	(173.5)
Non-current liabilities
Loans and borrowings	21	(264.7)	(414.7)
Retirement benefit obligations	25	(9.0)	(8.9)
Deferred tax liabilities	16	(138.7)	(131.3)
Lease liabilities	24	(30.3)	(30.2)
Provisions	15	(60.4)	(23.9)
Financial liabilities	21	(2.1)	(2.8)
Total non-current liabilities		(505.2)	(611.8)
Liabilities classified as held for sale	32	–	(57.8)
Total liabilities		(664.1)	(843.1)
Net assets		847.3	783.9
Equity
Share capital	17	52.5	52.3
Share premium		239.2	238.7
Other reserves	18	70.1	42.1
Retained earnings		485.5	450.8
Total equity attributable to holders of the parent		847.3	783.9
Total equity		847.3	783.9

The financial statements on pages 135 to 182 were approved by the Board on 6 March 2024 and signed on its behalf by:

Paul Waterman Ralph Hewins

CEO CFO

Consolidated balance sheet

As at 31 December 2023

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Annual Report and Accounts 2023

	Share	Share	Translation	Hedging	Other	Retained	Total
	capital	premium	reserve	reserve	reserves	earnings	equity
	$m	$m	$m	$m	$m	$m	$m
Balance at 1 January 2022	52.2	240.8	(67.7)	(8.6)	167.0	517.3	901.0
Comprehensive income:
Loss for the year	–	–	–	–	–	(51.1)	(51.1)
Other comprehensive loss:
Exchange differences (see Note 22)	–	–	(54.7)	–	(0.9)	–	(55.6)
Fair value of cash flow hedges transferred to the income
statement (see Note 22)	–	–	–	1.6	–	–	1.6
Effective portion of changes in fair value of cash flow hedges
(see Note 22)	–	–	–	(2.6)	–	–	(2.6)
Tax associated with changes in cash flow hedges	–	–	–	–	–	0.8	0.8
Tax associated with change in fair value of net investment hedge	–	–	–	–	–	(2.8)	(2.8)
Remeasurements of retirement benefit obligations (see Note 25)	–	–	–	–	–	(18.2)	(18.2)
Deferred tax associated with retirement benefit obligations	–	–	–	–	–	5.3	5.3
Transfer	–	–	–	7.8	(4.0)	(3.8)	–
Total other comprehensive (loss)/income	–	–	(54.7)	6.8	(4.9)	(18.7)	(71.5)
Total comprehensive (loss)/income	–	–	(54.7)	6.8	(4.9)	(69.8)	(122.6)
Transactions with owners:
Issue of shares by the Company	0.1	0.8	–	–	–	–	0.9
Deferred tax on share based payments recognised within equity	–	–	–	–	–	0.4	0.4
Share based payments (see Note 26)	–	–	–	–	3.4	–	3.4
Fair value of cash flow hedges transferred to net assets
(see Note 22)	–	–	–	0.8	–	–	0.8
Reserve reclassification	–	(2.9)		–	–	2.9	–
Total transactions with owners	0.1	(2.1)	–	0.8	3.4	3.3	5.5
Balance at 31 December 2022	52.3	238.7	(122.4)	(1.0)	165.5	450.8	783.9
Comprehensive income:
Profit for the year	–	–	–	–	–	26.5	26.5
Other comprehensive income:
Exchange differences (see Note 22)	–	–	9.7	–	0.2	–	9.9
Fair value of cash flow hedges transferred to the income
statement (see Note 22)	–	–	–	(6.3)	–	–	(6.3)
Effective portion of changes in fair value of cash flow hedges
(see Note 22)	–	–	–	12.7	–	–	12.7
Tax associated with changes in cash flow hedges	–	–	–	–	–	(0.6)	(0.6)
Tax associated with change in fair value of net investment hedge	–	–	–	–	–	(0.1)	(0.1)
Remeasurements of retirement benefit obligations (see Note 25)	–	–	–	–	–	12.3	12.3
Deferred tax associated with retirement benefit obligations	–	–	–	–	–	(2.8)	(2.8)
Recycling of deferred foreign exchange losses on disposal	–	–	9.3	–	–	–	9.3
Transfer	–	–	–	–	(2.3)	2.3	–
Total other comprehensive income/(loss)	–	–	19.0	6.4	(2.1)	11.1	34.4
Total comprehensive income/(loss)	–	–	19.0	6.4	(2.1)	37.6	60.9
Transactions with owners:
Issue of shares by the Company	0.2	0.5	–	–	–	–	0.7
Purchase of shares by Employee Share Options Trust (“ESOT”)	–	–	–	–	–	(1.6)	(1.6)
Deferred tax on share based payments recognised within equity	–	–	–	–	–	(1.3)	(1.3)
Share based payments (see Note 26)	–	–	–	–	4.2	–	4.2
Fair value of cash flow hedges transferred to net assets
(see Note 22)	–	–	–	0.5	–	–	0.5
Total transactions with owners	0.2	0.5	–	0.5	4.2	(2.9)	2.5
Balance at 31 December 2023	52.5	239.2	(103.4)	5.9	167.6	485.5	847.3

Consolidated statement of changes in equity

For the year ended 31 December 2023

138

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Annual Report and Accounts 2023

		2023	2022
	Note	$m	$m
Operating activities:
Profit/(loss) from continuing operations		28.2	(62.6)
Adjustments for:
Other expenses		2.3	1.3
Finance income		(4.4)	(9.9)
Finance costs		21.3	21.6
Tax charge		11.5	7.8
Depreciation and amortisation		55.7	56.9
Impairment loss on property, plant and equipment	11	–	23.0
Increase/(decrease) in provisions and financial liabilities		16.7	(7.7)
Pension payments net of current service cost	25	(3.1)	(0.7)
Share based payments expense	26	4.4	3.4
Impairment of goodwill	10	–	103.4
Operating cash flow before movement in working capital		132.6	136.5
Decrease/(increase) in inventories		22.5	(57.5)
(Increase)/decrease in trade and other receivables		(0.3)	6.5
(Decrease)/increase in trade and other payables		(20.1)	13.8
Cash generated by operations		134.7	99.3
Income taxes paid		(27.3)	(13.3)
Interest paid	4	(18.1)	(14.6)
Net cash flow used in operating activities from discontinued operations	32	(12.5)	5.6
Net cash flow from operating activities		76.8	77.0
Investing activities:
Interest received		0.4	0.2
Disposal of property, plant and equipment		–	(0.4)
Purchase of property, plant and equipment	11	(38.1)	(33.1)
Disposal of business	32	139.2	–
Acquisition of intangible assets	10	(0.1)	(0.2)
Net cash flow used in investing activities from discontinued operations	32	(0.3)	(13.4)
Net cash flow used in investing activities		101.1	(46.9)
Financing activities:
Issue of shares by the Company, net of repurchases of shares by ESOT		(1.0)	0.9
Net movement on existing debt	28	(160.5)	(51.6)
Payment of interest on lease liabilities	24	(1.3)	(1.4)
Payment of gross lease liabilities	24	(5.2)	(5.7)
Net cash flow used in financing activities from discontinued operations	32	–	–
Net cash flow used in financing activities		(168.0)	(57.8)
Net increase/(decrease) in cash and cash equivalents		9.9	(27.7)
Cash and cash equivalents at 1 January		54.9	84.6
Foreign exchange on cash and cash equivalents		1.0	(2.0)
Less: cash and cash equivalents classified as held for sale	32	–	–
Cash and cash equivalents at 31 December	20	65.8	54.9

1 2022 has been re-presented following the sale of the Chromium business, see Note 32 for further details.

Consolidated cash flow statement

For the year ended 31 December 2023

Strategic Report Financial Statements Shareholder InformationCorporate Governance

139

Elementis plc

Annual Report and Accounts 2023

1. Accounting policies

Elementis plc is a public company limited by shares incorporated

and domiciled in England and is the parent company of the Group.

The address of its registered office is The Bindery, 5th Floor,

51-53 Hatton Garden, London, EC1N 8HN . The Group financial

statements have been prepared and approved by the Directors in

accordance with UK adopted international accounting standards.

The Company has elected to prepare its parent company financial

statements in accordance with FRS 101. These are presented

on pages 183 to 189.

Basis of preparation

The financial statements have been prepared in accordance with

UK adopted international accounting standards in conformity with

the requirements of the Companies Act 2006 and International

Financial Reporting Standards (IFRS) as adopted by the UK.

These financial statements also comply with IFRS as issued

by the IASB.

The financial statements have been prepared on the historical cost

basis except that derivative financial instruments are stated at their

fair value. The preparation of financial statements requires the

application of estimates and judgements that affect the reported

amounts of assets and liabilities, revenues and costs and related

disclosures at the balance sheet date.

The financial statements have been prepared on a going concern

basis. The rationale for adopting this basis is discussed in the

Directors’ report on page 125.

Reporting currency

As a consequence of the majority of the Group’s sales and

earnings originating in US dollars or US dollar linked currencies,

the Group has chosen the US dollar as its presentational currency.

This aligns the Group’s external reporting with the profile of

the Group, as well as with internal management reporting.

The functional currency of the parent is pounds sterling.

Critical accounting judgements and key sources of

estimation uncertainty

When applying the Group’s accounting policies, management

must make a number of key judgements on the application of

applicable accounting standards and estimates and assumptions

concerning the carrying amounts of assets and liabilities that are

not readily apparent from other sources. These estimates and

judgements are based on factors considered to be relevant,

including historical experience, which may differ significantly

from the actual outcome. The key assumptions concerning the

future and other key sources of estimation uncertainty that have

a significant risk of causing a material adjustment to the amounts

recognised in the financial statements within the next year are

discussed below. The development of the estimates and

disclosures related to each of these matters has been

discussed by the Audit Committee.

Critical accounting judgements

The following is the sole critical judgement, as opposed to those

involving estimations which are dealt with separately below, that

the Directors have made in the process of applying the Group’s

accounting policies that has significant effect on the amounts for

the year ended 31 December 2023 recognised in the financial

statements. Where relevant and practicable, sensitivity analyses

are disclosed in the relevant notes to demonstrate the impact of

changes in estimates or assumptions used.

A. Revenue recognition

Judgement is exercised over how to determine the timing of

revenue recognition for orders where the agreed terms are

delivery to the destination point. The Group has compiled shipping

estimates based on the destination country which are used to

inform the timing of revenue recognition. In compiling these

estimates management have used past experience and carrier

standard shipping estimates to inform their decision making.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources

of estimation uncertainty at the reporting period that may have

a significant risk of causing a material misstatement to the carrying

amounts of assets and liabilities within the next financial year,

are discussed below.

A. Environmental provisions

Provisions for environmental restoration are recognised where:

the Group has a present legal or constructive obligation as

a result of past events; it is probable that an outflow of resources

will be required to settle the obligation; and the amount can be

estimated reliably.

Environmental provisions are measured at the present value of the

expenditures expected to be required to settle the obligation using

a pre-tax discount rate that reflects current market assessments

of the time value of money and the risks specific to the obligation.

Due to the long time horizons over which costs are anticipated,

small changes in recurring annual cash outflows can have a

significant cumulative impact on the total provision required.

At 31 December 2023 the carrying value of environmental

provisions was $60.5m. Further details of these provisions

and a sensitivity assessment are given in Note 15.

B. Valuation of a defined benefit pension obligation

The key estimates made in relation to defined benefit pensions

relate to the discount rate used to determine the present value of

future benefit, the rate of inflation applied to plan assets, mortality

rates and rates of salary growth. At 31 December 2023 the UK

scheme, the largest of the Group’s retirement plans, had a surplus

of $38.7m, the US pension scheme had a surplus of $3.4m whilst

the US PRMB scheme and other schemes were in a net deficit

position of $9.0m in aggregate. Further details of pensions and

a sensitivity analysis are given in Note 25.

C. Impairment testing of Talc Cash Generating Unit (“CGU”)

The Group performed an assessment as to whether the intangible

and tangible fixed assets of the Talc CGU are required to be

impaired. Based on the assessment performed no impairment

has been recognised. The assessment is sensitive to the higher

expected rehabilitation costs for the Finnish mines, for which

a reliable estimate cannot be made (see Note 30), as well as the

current ongoing appeal regarding the revocation certain mining

permits. The Group cannot reliably estimate the impact that these

events could have on future operations, however if they were to

result in a deterioration of future operating profits of the Talc CGU

then an impairment of the intangible and tangible fixed assets may

be required.

Notes to the consolidated financial statements

For the year ended 31 December 2023

140

Elementis plc

Annual Report and Accounts 2023

1. Accounting policies continued

Climate related risks

The financial statements have been prepared with consideration

of risks resulting from climate change, our ambition to reach net

zero by 2050, and in accordance with our Task Force for Climate

Change Related Financial Disclosures (“TCFD”) disclosures.

In conjunction with our net zero ambition and TCFD, a review

has been performed in the following areas that are deemed most

at-risk of being impacted by climate change:

A. Five year forecasting model

To support the carrying value of assets, impairment of goodwill

testing, going concern, and the viability statement, management

prepare a five year forecasting model. The five year forecasting

model includes actions already taken by management to work

towards achieving the Group’s net zero ambition. Specifically,

for the impairment of goodwill and the carrying value of the CGUs,

management considered the risks associated with: carbon pricing;

customer, consumer and investor demands; raw material supply/

prices; access to renewable electricity; energy prices; water

scarcity; and extreme weather events. Based on that consideration

management have not made any adjustments to the five year

forecasting model.

B. Useful economic lives of property, plant and equipment,

right of use assets and intangible assets.

Management have reviewed the useful economic life of the

Group’s non-current assets with respect to the physical risk

resulting from extreme weather events and our net zero ambition

and have concluded that the current economic useful lives are

in line with all current and foreseeable plans.

C. Environmental provisions

Management have considered the Group’s legal, regulatory and

social obligations in determining the estimate of costs associated

the closure and remediation of our sites. A provision has been

recognised where management can make a reliable estimate of

the costs associated with the closure and remediation of these

sites (see Note 15). Where a reliable estimate cannot be made,

a contingent liability has been disclosed (see note 30).

After detailed consideration of the aforementioned climate risks,

management are comfortable that no adjustments are required

to the carrying value of non-current assets and liabilities for the

year ended 31 December 2023.

Basis of consolidation

The consolidated financial statements include the financial

statements of the Company and its subsidiaries for the year.

Subsidiaries are all entities (including structured entities) over

which the Group has control. The Group controls an entity when

the Group is exposed to, or has rights to, variable returns from

its involvement with the entity and has the ability to affect those

returns through its power over the entity. Subsidiaries are fully

consolidated from the date on which control is transferred to the

Group. They are deconsolidated from the date on which that

control ceases.

The Group applies the acquisition method to account for business

combinations. The consideration transferred for the acquisition of

a subsidiary is the fair value of the assets transferred, the liabilities

incurred to the former owners of the acquiree, and the equity

interests issued by the Group. The consideration transferred

includes the fair value of any asset or liability resulting from

a contingent consideration arrangement. Identifiable assets

acquired and liabilities and contingent liabilities assumed in

a business combination are measured initially at their fair value

at the acquisition date. The Group recognises any non-controlling

interest in the acquiree on an acquisition-by-acquisition basis,

either at fair value or at the non-controlling interest’s proportionate

share of the recognised amounts of the acquiree’s identifiable

net assets.

Acquisition costs are accounted for as an expense in the

period incurred.

Intragroup balances and any unrealised gains and losses or

income and expenses arising from intragroup transactions,

are eliminated in preparing the consolidated financial

statements. Unrealised losses are eliminated in the same way

as unrealised gains, but only to the extent that there is no

evidence of impairment.

A full list of the Group’s subsidiaries is shown in Note 6 of the

parent company financial statements.

Changes in accounting policies

The accounting policies adopted are consistent with those of

the previous financial year.

Foreign currency

A. Foreign currency transactions

Transactions in foreign currencies are translated at the foreign

exchange rate ruling at the date of the transaction. Monetary

assets and liabilities denominated in foreign currencies at the

balance sheet date are translated at the foreign exchange rate

ruling at that date. Foreign exchange differences arising on

translation are recognised in the income statement. Non-monetary

assets and liabilities denominated in foreign currencies that are

stated at fair value are translated at exchange rates ruling at the

dates the fair value was determined.

B. Financial statements of foreign operations

The assets and liabilities of foreign operations, including goodwill

and fair value adjustments arising on consolidation, are translated

at exchange rates ruling at the balance sheet date. The revenues

and expenses of foreign operations are translated at the average

rates of exchange ruling for the relevant period. Exchange

differences arising since 1 January 2004 on translation are taken

to the translation reserve. They are recognised in the income

statement upon disposal of the foreign operation. The Group may

hedge a portion of the translation of its overseas net assets

through US dollar and euro borrowings. From 1 January 2005,

the Group has elected to apply net investment hedge accounting

for these transactions where possible. Where hedging is applied,

the effective portion of the gain or loss on an instrument used to

hedge a net investment is recognised in equity. Any ineffective

portion of the hedge is recognised in the income statement.

Intangible assets

A. Goodwill

Goodwill arises on the acquisition of subsidiaries and represents

the excess of the consideration transferred, the amount of any

non-controlling interest in the acquiree and the acquisition-date

fair value of any previous equity interest in the acquiree over the

fair value of the identifiable net assets acquired. If the total of

consideration transferred, non-controlling interest recognised and

previously held interest measured at fair value is less than the fair

value of the net assets of the subsidiary acquired, in the case of

a bargain purchase, the difference is recognised directly in the

income statement.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

141

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Annual Report and Accounts 2023

1. Accounting policies continued

B. Research and development

Expenditure on pure research is recognised in the income

statement as an expense as incurred. Under IAS 38, expenditure

on development where research findings are applied to a plan or

design for the production of new or substantially improved

products and processes is capitalised if the product or process

will give rise to future economic benefits and where the cost of

the capitalised asset can be measured reliably. Expenditure

capitalised is stated as the cost of materials, direct labour and

an appropriate proportion of overheads less accumulated

amortisation. The length of development lifecycles, broad nature of

much of the research undertaken and uncertainty until a late stage

as to the ultimate commercial viability of a potential product can

mean that the measurement criteria of IAS 38 regarding the

probability of future economic benefits and the reliability of

allocating costs may not be met, in which case expenditure is

expensed as incurred .

C. Customer relationships, brands and other intangible assets

Customer relationships, brands and other intangible assets

are stated at cost or when arising in a business combination,

estimated fair value, less accumulated amortisation.

D. Amortisation

Amortisation is charged to the income statement on a straight line

basis over the estimated useful lives of intangible assets through

the administrative expenses line item, unless such lives are

indefinite. Goodwill is systematically tested for impairment

each year. Other intangible assets, comprising customer lists,

customer relationships, manufacturing processes and procedures,

trademarks, non-compete clauses and patents are amortised

over their estimated useful lives which range from 4 to 23 years.

Property, plant and equipment

Items of property, plant and equipment are stated at cost less

accumulated depreciation and impairment losses. Freehold land

is not depreciated. Leasehold property is depreciated over the

period of the lease. Freehold buildings, plant and machinery,

fixtures, fittings and equipment are depreciated over their

estimated useful lives on a straight line basis. Depreciation

methods, useful lives and residual values are assessed at the

reporting date. No depreciation is charged on assets under

construction until the asset is available for use.

Depreciation is charged on a straight-line basis over the estimated

useful economic lives of the assets as follows:

Buildings 10 – 50 years

Plant and machinery 2 – 20 years

Fixtures, fittings and

equipment

2 – 20 years

Right of use assets Shorter of the useful economic life

of the asset and the lease term

The cost of replacing part of an item of property, plant and

equipment is recognised in the carrying amount of the item if it is

probable that the future economic benefits embodied within it will

flow to the Group and its cost can be measured reliably. The costs

of the day-to-day servicing of property, plant and equipment are

recognised in the income statement as incurred.

Management regularly considers whether there are any indicators

of impairment to carrying values of property, plant and equipment.

Impairment reviews are based on risk adjusted discounted

cash flow projections. Significant judgement is applied to the

assumptions underlying these projections which include estimated

discount rates, growth rates, future selling prices and direct costs.

Changes to these assumptions could have a material impact on

the financial position of the Group and on the result for the year.

Impairment of non-current non-financial assets

The carrying amount of non-current assets other than deferred tax

is compared to the asset’s recoverable amount at each balance

sheet date where there is an indication of impairment. For goodwill,

assets that have an indefinite useful life and intangible assets that

are not yet available for use, the recoverable amount is estimated

at each balance sheet date.

Annually the Group carries out impairment tests of its goodwill and

other indefinite life intangible assets which requires an estimate

to be made of the value in use of its CGUs. These value in use

calculations are dependent on estimates of future cash flows

and long term growth rates of the CGUs. Further details of these

estimates are given in Note 10.

An impairment loss is recognised whenever the carrying

amount of an asset or its CGU exceeds its recoverable amount.

Impairment losses are recognised in the income statement.

Impairment losses recognised in respect of CGUs are allocated

first to reduce the carrying amount of any goodwill allocated to

CGUs and then to reduce the carrying amount of the other assets

in the unit on a pro-rata basis. A CGU is the smallest identifiable

group of assets that generates cash inflows that are largely

independent of the cash inflows from other assets or groups

of assets.

The recoverable amount is the greater of their fair value less costs

to sell and value in use. In assessing value in use, the estimated

future cash flows are discounted to their present value using a

pre-tax discount rate that reflects current market assessments

of the time value of money and the risks specific to the asset(s).

For an asset that does not generate largely independent cash

inflows, the recoverable amount is determined for the CGU to

which the asset belongs.

Inventories

Inventories are stated at the lower of cost and net realisable value.

Net realisable value is the estimated selling price, less estimated

costs of completion and selling expenses. Cost, which is based

on a weighted average, includes expenditure incurred in acquiring

stock and bringing it to its existing location and condition. In the

case of manufactured inventories and work in progress, cost

includes an appropriate share of overheads attributable to

manufacture, based on normal operating capacity.

Trade and other receivables

Trade receivables and other receivables are due for payment

within one year and are thus classified as current. They are

non-interest bearing and are stated at their nominal amount

which is the original invoiced amount, less allowance for expected

future credit losses. Estimates of future expected credit losses are

informed by historical experience and management’s expectations

of future economic factors, further information on expected credit

loss impairment is given in the impairment of financial assets

accounting policy. Individual trade receivables are written off

when management deem them to be no longer collectable.

Notes to the consolidated financial statements

continued

142

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Annual Report and Accounts 2023

1. Accounting policies continued

Impairment of financial assets – expected credit losses

The Group applies the IFRS 9 simplified approach to measuring

expected credit losses which uses a lifetime expected loss

allowance for all trade receivables.

To measure the expected credit losses, trade receivables have

been grouped based on shared credit risk characteristics

and the days past due. The expected loss rates are based on

payment profiles and the corresponding historical credit losses

experienced. The historical loss rates are adjusted to reflect

current and forward looking information in relation to

macroeconomic factors that could affect the ability of

customers to settle receivables.

The Group usually considers a financial asset in default when

contractual payments are 120 days past due. In certain cases,

the Group may also consider a financial asset to be in default

when internal or external information indicates that the Group

is unlikely to receive the outstanding contractual amounts in full

before taking into account any credit enhancements held by the

Group. A financial asset is written off when there is no reasonable

expectation of recovering the contractual cash flows.

Trade and other payables

Trade payables are non-interest bearing borrowings and are

initially measured at fair value and subsequently carried at

amortised cost.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call

deposits with an original maturity of three months or less. Bank

overdrafts that are repayable on demand and form an integral part

of the Group’s cash management are included as a component of

cash and cash equivalents for the purpose of the statement of

cash flows.

Borrowings

Borrowings are initially measured at cost, which is equal to the fair

value at inception, and are subsequently measured at amortised

cost using the effective interest rate method. Any difference

between the proceeds, net of transaction costs and the settlement

or redemption of borrowings is recognised over the terms of

the borrowings using the effective interest rate method.

Pension and other post retirement benefits

In respect of the Group’s defined benefit schemes, the Group’s net

obligation in respect of defined benefit pension plans is calculated

by estimating the amount of future benefit that employees have

earned in return for their service in the current and prior periods,

that benefit is discounted to determine its present value, and the

fair value of any plan assets is deducted. The liability discount rate

is the yield at the balance sheet date on AA credit rated bonds

that have maturity dates approximating to the terms of the Group’s

obligations. Pension and post retirement liabilities are calculated

by qualified actuaries using the projected unit credit method.

Following the introduction of the revised IAS 19 Employee Benefits

standard, the net interest on the defined benefit liability consists

of the interest cost on the defined benefit obligation and the

interest income on plan assets, both calculated by reference to

the discount rate used to measure the defined benefit obligation

at the start of the period.

The Group recognises actuarial gains and losses in the period

in which they occur through the statement of comprehensive

income. The Group also operates a small number of defined

contribution schemes and the contributions payable during the

year are recognised as incurred. Due to the size of the Group’s

pension scheme assets and liabilities, relatively small changes in

the assumptions can have a significant impact on the expense

recorded in the income statement and on the pension liability

recorded in the balance sheet.

Leases

A lease liability is recognised when the Group obtains control of

the right-of-use asset that is the subject of the lease. The lease

liability is subsequently measured using the effective interest

method, with interest charged to finance costs. Right-of-use assets

are generally depreciated over the shorter of the asset’s useful

life and the lease term on a straight-line basis. If the Group is

reasonably certain to exercise a purchase option, the right-of-use

asset is depreciated over the underlying asset’s useful life.

At inception, the Group evaluates whether it is reasonably certain

that any option to extend a lease term will be exercised or likewise

whether any option to terminate the lease will be exercised.

The Group continues to evaluate the likelihood of exercising

such options throughout the initial lease term. When the Group

is committed to extending or terminating the lease, having

considered the alternative options available, and where

appropriate lessor consent to the extension or termination has

been obtained, the Group will consider the option to be reasonably

certain to be exercised. When an option is reasonably certain to

be exercised, the right-of-use asset and lease liabilities recognised

are adjusted to reflect the extended or curtailed lease term.

Leases, which at inception have a term of less than 12 months or

relate to low-value assets, are not recognised on balance sheet.

Payments made under such leases are recognised as an expense

in the income statement on a straight-line basis over the period of

the lease.

Provisions

A provision is recognised in the balance sheet when the Group

has a present legal or constructive obligation as a result of a past

event, it is probable that an outflow of economic benefits will be

required to settle the obligation and a reliable estimate can be

made. If the effect is material, provisions are determined by

discounting the expected future cash flows at a pre-tax rate that

reflects current market assessments of the time value of money

and, where appropriate, the risks specific to the liability.

A provision for restructuring is recognised when the Group has

approved a detailed and formal restructuring plan and the

restructuring has either commenced or has been announced

publicly. In accordance with the Group’s environmental policy

and applicable legal requirements, a provision for site restoration

in respect of contaminated land is recognised when the land is

contaminated. Provisions for environmental issues are judgemental

by their nature, particularly when considering the size and timing

of remediation spending, and are more difficult to estimate when

they relate to sites no longer directly controlled by the Group.

Self-insurance provisions relate to personal injury and other

claims from former employees or third parties and represent

the aggregate of outstanding claims plus a projection of losses

incurred but not yet reported which together make up the full

liability recognised as a provision. Insurance recoveries are

recognised as a separate reimbursement asset.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

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Annual Report and Accounts 2023

1. Accounting policies continued

Derivative financial instruments

The Group uses derivative financial instruments, such as forward

currency contracts, interest rate swaps and commodity swap

contracts, to hedge its foreign currency risks, interest rate risks

and commodity price risks, respectively. The Group does not hold

or issue derivative financial instruments for speculative trading

purposes. However, derivatives that do not qualify for hedge

accounting are accounted for as trading instruments. Due to the

requirement to assess the effectiveness of hedging instruments,

changes in market conditions can result in the recognition of

unrealised gains or losses on hedging instruments in the

income statement.

Derivative financial instruments are recognised initially at fair value

and are shown within derivatives if they are in an asset position or

within financial liabilities if they are in a liability position. The gain

or loss on remeasurement to fair value is recognised immediately

in the income statement. However, where derivatives qualify

for hedge accounting, recognition of any resultant gain or loss

depends on the nature of the item being hedged.

A. Cash flow hedges

Where a derivative financial instrument is designated as a hedge

of the variability in cash flows of a recognised asset or liability,

or a highly probable forecast transaction, the effective part of any

gain or loss on the derivative financial instrument is recognised

directly in the hedging reserve. Any ineffective portion of the

hedge is recognised immediately in the income statement.

Amounts previously recognised in other comprehensive income

and accumulated in equity are reclassified to profit and loss in

the periods when the hedged item is recognised in profit or loss,

in the same line of the income statement as the recognised

hedged item. However, when the forecast transaction that is

hedged results in the recognition of a non-financial asset the

gains or losses previously accumulated in equity are transferred

from equity and included in the initial measurement of the cost of

the non-financial asset.

B. Fair value hedges

Where a derivative financial instrument is designated as a hedge of

the variability in a fair value of a recognised asset or liability or an

unrecognised firm commitment, all changes in the fair value of the

derivative are recognised immediately in the income statement.

The carrying value of the hedged item is adjusted by the change

in fair value that is attributable to the risk being hedged, even if it

is normally carried at amortised cost, and any gains or losses

on remeasurement are recognised immediately in the income

statement, even if those gains would normally be recognised

directly in reserves.

C. Hedges of a net investment in a foreign operation

The Group designates the foreign exchange gain or loss on

a proportion of the Group’s euro and US dollar denominated

borrowings as a hedge of the Group’s net investment in foreign

operations. As such the foreign exchange gain or loss on those

borrowings is recognised in other comprehensive income and

accumulated in equity until such time as the operations are

disposed of at which point the corresponding amounts are

recycled to profit or loss.

Share capital

Incremental costs directly attributable to the issue of ordinary

shares and share options are recognised as a deduction from

equity. When share capital recognised as equity is repurchased,

the amount of the consideration paid, including directly attributable

costs, is recognised as a deduction from equity. Shares

repurchased by the Company are classified as treasury shares

and are presented as a deduction from total equity.

Own shares held by ESOT

Transactions of the Group sponsored ESOT are included

in the consolidated financial statements. In particular,

the ESOT’s purchases of shares in the Company are charged

directly to equity.

Non-current assets held for sale and

discontinued operations

A non-current asset or a group of assets containing a non-current

asset (a disposal group), is classified as held for sale if its carrying

amount will be recovered principally through sale rather than

through continuing use, it is available for immediate sale and sale

within one year is highly probable. On initial classification as held

for sale, non-current assets and disposal groups are measured at

the lower of previous carrying amount and fair value less costs to

sell with any adjustments taken to profit or loss. The same applies

to gains and losses on subsequent remeasurement.

A discontinued operation is a component of the Group’s business

that represents a separate major line of business or geographic

area of operations or is a subsidiary acquired exclusively with

a view to resale, that has been disposed of, has been abandoned,

or that meets the criteria to be classified as held for sale.

Revenue

Revenue is recognised upon transfer of promised goods to

customers (the performance obligation) in an amount that reflects

the consideration the Company expects to receive in exchange

for those goods. This may occur, depending on the individual

customer relationship, when the product has been transferred

to a freight carrier, when the customer has received the product

or, for consignment stock held at customers’ premises, when

usage reports for the relevant period have been compiled.

All revenue is from contracts with customers and pertains to the

sale of specialty chemicals products. Selling prices are agreed

in advance and hence are directly observable.

The Group’s payment terms offered to customers are within

a certain number of days of receipt of invoice and standard

contracts do not include a significant financing component.

The Group does not expect to have any contracts where the

period between the transfer of the promised goods to the

customer and payment by the customer exceeds one year.

As a consequence, the Group does not adjust any of the

transaction prices for the time value of money.

Provisions for returns, trade discounts and rebates are recognised

as a reduction in revenue at the later of when revenue is

recognised for the transfer of the related goods and the entity

pays or promises to pay the consideration. The promise to pay

rebates is contractually agreed in advance and thus the point of

transferring the goods to the customer is deemed to be the later

of the two circumstances. Rebates and discounts are estimated

using historical data and experiences with the customers.

Returns from customers are negligible.

Notes to the consolidated financial statements

continued

144

Elementis plc

Annual Report and Accounts 2023

1. Accounting policies continued

Operating profit

Operating profit includes net profits realised on the sale of tangible

fixed assets, current and long term assets and liabilities but

excludes gains and losses on the disposal of businesses.

Other expenses

Other expenses are administration costs incurred and paid by

the Group’s pension schemes, which relate primarily to former

employees of legacy businesses.

Finance income and finance costs

Finance income comprises interest income on funds invested

and changes in the fair value of financial instruments at fair value

taken to the income statement. Interest income is recognised

as it accrues, using the effective interest method.

Finance costs comprise interest expense on borrowings, lease

liabilities, unwinding of the discount on provisions, dividends on

preference shares classified as debt, foreign currency gains/losses

and changes in the value of financial instruments at fair value taken

to the income statement. All borrowing costs are recognised in

the income statement using the effective interest method.

Taxation

Income tax on the profit or loss for the year comprises current and

deferred tax. Income tax is recognised in the income statement

except to the extent that it relates to items recognised directly

in equity or in other comprehensive income. Current tax is the

expected tax payable on the taxable income for the year, using tax

rates enacted or substantively enacted at the balance sheet date,

and any adjustment to tax payable in respect of previous years.

A deferred tax asset is recognised only to the extent that it is

probable that future taxable profits will be available against which

the asset can be utilised. Deferred tax is provided on temporary

differences between the carrying amounts of assets and liabilities

for financial reporting purposes and the amounts used for taxation

purposes. The following temporary differences are not provided

for: the initial recognition of goodwill; the initial recognition of

assets or liabilities that affect neither accounting nor taxable profit

other than in a business combination; and differences relating to

investments in subsidiaries to the extent that they will probably

not reverse in the foreseeable future. The amount of deferred

tax provided is based on the expected manner of realisation or

settlement of the carrying amount of assets and liabilities, using

tax rates enacted or substantively enacted at the balance sheet

date. Deferred tax assets are reduced to the extent that it is no

longer probable that the related tax benefit will be realised.

The Group is required to estimate the income tax in each of the

jurisdictions in which it operates. This requires an estimation of

current tax liability together with an assessment of the temporary

differences which arise as a consequence of different accounting

and tax treatments. The Group operates in a number of countries

in the world and is subject to many tax jurisdictions and rules.

As a consequence the Group is subject to tax audits, which by

their nature are often complex and can require several years to

conclude. Management’s judgement is required to determine the

total provision for income tax. Amounts are accrued based on

management’s interpretation of country specific tax law and

likelihood of settlement. However, the actual tax liabilities could

differ from the position and in such events an adjustment would

be required in the subsequent period which could have a material

impact. Tax benefits are not recognised unless it is probable that

the tax positions are sustainable. Once considered to be probable,

management reviews each material tax benefit to assess whether

a provision should be taken against full recognition of the benefit

on the basis of potential settlement through negotiation. This

evaluation requires judgements to be made including the forecast

of future taxable income.

Share based payments

The fair value of equity settled share options, cash settled shadow

options and LTIP awards granted to employees is recognised

as an expense with a corresponding increase in equity. The fair

value is measured at grant date and spread over the period during

which the employees become unconditionally entitled to the

options/awards. The fair value of the options/awards granted is

measured using a binomial model, taking into account the terms

and conditions upon which the options/awards were granted.

The amount recognised as an employee expense is adjusted to

reflect the actual number of share options/awards that vest except

where forfeiture is only due to share prices not achieving the

threshold for vesting.

Short-term employee benefits

Short-term employee benefits, such as salaries, paid absences,

and other benefits including any related payroll taxes are

accounted for on an accrual basis over the period which

employees have provided services. Bonuses are recognised

to the extent that the Group has a present obligation to its

employees that can be measured reliably and are accounted for in

accordance with the requirements of IAS 19, ‘Employee benefits’.

All expenses relating to employee benefits (other than pension

costs) are recognised in the income statement within wages and

salaries, or social security costs.

Termination benefits

Termination benefits are recognised as an expense when the

Group is demonstrably committed, without realistic possibility

of withdrawal, to a formal detailed plan to terminate employment

before the normal retirement date. Termination benefits for

voluntary redundancies are recognised if the Group has made

an offer encouraging voluntary redundancy, it is probable that

the offer will be accepted, and the number of acceptances can

be estimated reliably.

Government grants

Government grants are recognised at fair value when there is

reasonable assurance that the conditions associated with the

grants have been complied with and the grants will be received.

Grants compensating for expenses incurred are recognised as

a deduction of the related expenses in the consolidated income

statement on a systematic basis in the same periods in which the

expenses are incurred.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

145

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Annual Report and Accounts 2023

1. Accounting policies continued

Alternative performance measures

In the analysis of the Group’s operating results, earnings per

share and cash flows, information is presented to provide readers

with additional performance indicators that are prepared on a

non-statutory basis. This presentation is regularly reviewed by

management to identify items that are unusual and other items

relevant to an understanding of the Group’s performance and long

term trends with reference to their materiality and nature. This

additional information is not uniformly defined by all companies

and may not be comparable with similarly titled measures and

disclosures by other organisations. The non-statutory disclosures

should not be viewed in isolation or as an alternative to the

equivalent statutory measure. Information for separate

presentation is considered as follows:

Material costs or reversals arising from a significant restructuring

of the Group’s operations are presented separately

Disposal of entities or investments in associates or joint ventures

or impairment of related assets are presented separately

Other matters arising due to the Group’s acquisition, such as

adjustments to contingent consideration, payment of retention

bonuses, acquisition costs and fair value adjustments for

acquired assets made in accordance with IFRS 13 are

separately disclosed in aggregate

If a change in an accounting estimate for provisions, including

environmental provisions, results in a material gain or loss,

that is presented separately

Other items the Directors may deem to be unusual as a result

of their size and/or nature.

Adoption of new and revised standards

In the current year, the Group has applied a number of

amendments to IFRSs issued by the International Accounting

Standards Board (“IASB”) that are mandatorily effective for

accounting periods that began on or after 1 January 2023.

Their adoption has not had any material impact on the disclosures

or on the amounts reported in these financial statements:

	UK
International Accounting Standards	Endorsement
(IAS/IFRSs) and Interpretations (IFRICs):	status	Effective date
IFRS 17 Insurance Contracts	Endorsed	1 January
		2023
Amendments to IFRS 17: Initial	Endorsed	1 January
Application of IFRS 17 and IFRS 9 –		2023
Comparative Information
Amendments to IAS 1 and IFRS	Endorsed	1 January
Practice Statement 2: Disclosure of Accounting Policies		2023
Amendments to IAS 8: Definition of	Endorsed	1 January
Accounting Estimates		2023
Amendments to IAS 12: Deferred Tax	Endorsed	1 January
related to Assets and Liabilities arising		2023
from a Single Transaction
Amendment to IAS 12 - International	Endorsed	1 January
tax reform - pillar two model rules		2023

New and revised IFRSs in issue but not yet effective

At the date of authorisation of these financial statements, the

Group has not applied the following new and revised international

accounting standards (“IAS”/“IFRSs”) and interpretations

(“IFRICs”) that have been issued but are not effective for periods

starting on 1 January 2023 but will be effective for later periods:

		Effective
		for annual
		reporting
International Accounting Standards	UK	periods
(IAS/IFRSs) and Interpretations (IFRICs)	Endorsement	beginning
not yet endorsed for use in the EU or UK:	status	on or after
Amendments to IAS 1: Classification of	Endorsed	1 January
Liabilities as Current or Non-current		2024
Amendments to IFRS 16 Leases:	Endorsed	1 January
Lease Liability in a Sale and Leaseback		2024
Amendments to IAS 1: Non-Current	Endorsed	1 January
Liabilities with Covenants		2024
Amendment to IAS 7 and IFRS 7 –	Not yet	1 January
Supplier finance	endorsed	2024
Amendments to IAS 21 –	Not yet	1 January
Lack of Exchangeability	endorsed	2025
IFRS S1: General requirements for	Not yet	1 January
disclosure of sustainability-related	endorsed	2024
financial information
IFRS S2: Climate-related disclosures	Not yet	1 January
	endorsed	2024

2. Operating segments

Business segments

The Group has determined its operating segments on the basis

of those used for management, internal reporting purposes and

the allocation of strategic resources. The key measure used for

review of the performance of the operating segments is adjusted

operating profit. In accordance with the provisions of IFRS 8, the

Group’s chief operating decision maker is the Board of Directors.

Effective from 1 January 2023 the results of the Coatings and

Talc segments were merged and are now 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. We will continue to report results for the Coatings

and Talc businesses.

The two reportable segments, Performance Specialties and

Personal Care each have distinct product groupings and separate

management structures. Segment results, assets and liabilities

include items directly attributable to a segment and those that may

be reasonably allocated from corporate activities. Presentation of

the segmental results is on a basis consistent with those used for

reporting Group results. The principal activities of the reportable

segments are as follows:

Performance Specialties

Which consists of:

Coatings: Production of rheological modifiers and additives for

decorative and industrial coatings.

Talc: Production and supply of talc for use in plastics, coatings,

technical ceramics and the paper sectors.

Personal Care

Production of rheological modifiers and compounded products,

including active ingredients for AP deodorants, for supply to

personal care manufacturers.

Notes to the consolidated financial statements

continued

146

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Annual Report and Accounts 2023

2. Operating segments continued

Segmental analysis for the year ended 31 December 2023

				2023
			Performance
			Specialties	Personal	Segment	Central
	Coatings	Talc	totals	Care	totals	costs	Total
	$m	$m	$m	$m	$m	$m	$m
Revenue	367.6	136.5	504.1	209.3	713.4	–	713.4
Internal revenue	–	–	–	–	–	–	–
Revenue from external customers	367.6	136.5	504.1	209.3	713.4	–	713.4
Adjusted operating profit/(loss)	56.1	14.0	70.1	50.3	120.4	(16.5)	103.9
Adjusting items (see Note 5)	(0.9)	(5.4)	(6.3)	(7.1)	(13.4)	(31.6)	(45.0)
Operating profit/(loss)	55.2	8.6	63.8	43.2	107.0	(48.1)	58.9
Other expenses							(2.3)
Finance income							4.4
Finance expense							(21.3)
Tax							(11.5)
Loss from discontinued operations							(1.7)
Profit for the year							26.5

			2023
	Personal
	Care and		Segment	Central
	Coatings	Talc	totals	costs	Total
	$m	$m	$m	$m	$m
Fixed assets	763.0	295.4	1,058.4	15.8	1,074.2
Inventories	135.8	27. 4	163.2	0.1	163.3
Trade and other receivables	77.4	19.8	97. 2	4.6	101.8
Other tax recoverable	–	–	–	20.0	20.0
Derivatives	–	–	–	13.4	13.4
Tax assets	–	–	–	30.8	30.8
Retirement benefit surplus	–	–	–	42.1	42.1
Cash and cash equivalents	–	–	–	65.8	65.8
Total assets	976.2	342.6	1,318.8	192.6	1,511.4
Trade and other payables	(74.1)	(22.5)	(96.6)	(21.3)	(117.9)
Operating provisions	(32.3)	(36.6)	(68.9)	(13.0)	(81.9)
Lease liabilities	(23.9)	(9.4)	(33.3)	(2.9)	(36.2)
Bank overdrafts and loans	–	–	–	(264.7)	(264.7)
Current tax liabilities	–	–	–	(13.6)	(13.6)
Retirement benefit obligations	–	–	–	(9.0)	(9.0)
Deferred tax liabilities	–	–	–	(138.7)	(138.7)
Financial liabilities	–	–	–	(2.1)	(2.1)
Total liabilities	(130.3)	(68.5)	(198.8)	(465.3)	(664.1)
Net assets	845.9	274.1	1,120.0	(272.7)	847.3
Capital additions	13.6	51.6	65.2	6.5	71.7
Depreciation and amortisation	(27.8)	(24.5)	(52.3)	(2.6)	(54.9)

1 Due to the shared nature of the production facilities for the Personal Care segment and the Coatings business a split of assets and liabilities by segment is not

available and the cost to determine such a split would be prohibitive, therefore the assets and liabilities are shown in aggregate for these segments.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

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Annual Report and Accounts 2023

2. Operating segments continued

Analysis by geography

	North	United	Rest of	Rest of
	America	Kingdom	Europe	the World	Total
2023	$m	$m	$m	$m	$m
Revenue from external customers	231.8	24.8	263.4	193.4	713.4
Fixed assets	652.5	30.6	316.7	74.4	1,074.2
Capital additions	10.0	4.9	51.6	5.2	71.7
Depreciation and amortisation	(22.9)	(1.6)	(26.4)	(4.0)	(54.9)

Revenue is based on the location of the customer. The Group’s largest customer accounts for 8.5% of revenue ($60.3m) .

Segmental analysis for the year ended 31 December 2022

				2022
			Performance
			Specialties	Personal	Segment	Central
	Coatings	Talc	totals	Care	totals	costs	Total
	$m	$m	$m	$m	$m	$m	$m
Revenue	389.1	135.8	524.9	211.5	736.4	–	736.4
Internal revenue	–	–	–	–	–	–	–
Revenue from external customers	389.1	135.8	524.9	211.5	736.4	–	736.4
Adjusted operating profit/(loss)	70.3	(0.4)	69.9	49.0	118.9	(18.4)	100.5
Adjusting items (see Note 5)	(4.1)	(133.6)	(137.7)	(8.4)	(146.1)	3.8	(142.3)
Operating profit/(loss)	66.2	(134.0)	(67.8)	40.6	(27. 2)	(14.6)	(41.8)
Other expenses							(1.3)
Finance income							9.9
Finance expense							(21.6)
Tax							(7.8)
Profit from discontinued operations							11.5
Loss for the year							(51.1)

Notes to the consolidated financial statements

continued

148

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Annual Report and Accounts 2023

2. Operating segments continued

			2022
	Personal
	Care, and		Segment	Central
	Coatings	Talc	totals	costs	Total
	$m	$m	$m	$m	$m
Fixed assets	774.6	259.4	1,034.0	12.6	1,046.6
Inventories	151.6	30.3	181.9	0.1	182.0
Trade and other receivables	70.9	17. 2	88 .1	6.8	94.9
Other tax recoverable	–	–	–	17.5	17.5
Derivatives	–	–	–	12.0	12.0
Tax assets	–	–	–	31.8	31.8
Retirement benefit surplus	–	–	–	26.4	26.4
Cash and cash equivalents	–	–	–	54.9	54.9
Segment assets	997.1	306.9	1,304.0	162.1	1,466.1
Assets classified as held for sale					160.9
Total assets					1,627.0
Trade and other payables	(83.6)	(27.3)	(110.9)	(24.5)	(135.4)
Operating provisions	(0.8)	(4.6)	(5.4)	(24.3)	(29.7)
Lease liabilities	(2 6.1)	(9.6)	(35.7)	(0.6)	(36.3)
Bank overdrafts and loans	–	–	–	(417. 4)	(417.4)
Current tax liabilities	–	–	–	(20.2)	(20.2)
Retirement benefit obligations	–	–	–	(8.9)	(8.9)
Deferred tax liabilities	–	–	–	(131.3)	(131.3)
Financial liabilities	–	–	–	(6.1)	(6.1)
Segment liabilities	(110.5)	(41.5)	(152.0)	(633.3)	(785.3)
Liabilities classified as held for sale					(57.8)
Total liabilities					(8 43.1)
Net assets	888.6	265.4	1,152.0	(471.2)	783.9
Capital additions	18.3	17.1	35.4	3.2	38.6
Depreciation and amortisation	(28.6)	(24.8)	(53.4)	(3.2)	(56.6)

1 Due to the shared nature of the production facilities for the Personal Care segment and the Coatings business a split of assets and liabilities by segment is not

available and the cost to determine such a split would be prohibitive. Assets and liabilities are therefore shown in aggregate for these segments.

Analysis by geography

	North	United	Rest of	Rest of
	America	Kingdom	Europe	the World	Total
2022	$m	$m	$m	$m	$m
Revenue from external customers	234.6	23.2	250.3	228.3	736.4
Fixed assets	666.9	26.4	280.9	72.4	1,046.6
Capital additions	20.1	6.0	5.3	7.2	38.6
Depreciation and amortisation	(24.0)	(1.5)	(27.9)	(3.2)	(56.6)

Revenue is based on the location of the customer. The Group’s largest customer accounts for 7.5% of revenue ($55.6m).

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3. Finance income

	2023	2022
	$m	$m
Interest on bank deposits	0.5	0.2
Pension and other post
retirement liabilities	1.0	0.6
Fair value movement on derivatives	1.5	9.1
Interest on EU state aid receivable	1.4	–
Total finance income	4.4	9.9

4. Finance costs

	2023	2022
	$m	$m
Interest on bank loans	17.5	19.5
Unwind of discount on provisions	1.4	0.7
Interest on lease liabilities	1.3	1.4
Fair value movements on derivatives	1.1	–
Total finance costs	21.3	21.6

5. Adjusting items

	2023	2022
	$m	$m
Business transformation	26.1	4.8
Environmental provisions
Increase in provisions due
to additional remediation
work identified	6.6	3.4
Decrease in provisions due
to change in discount rate	(0.4)	( 7. 2)
Impairment of property, plant and equipment	–	23.0
Impairment of goodwill	–	103.4
Amortisation of intangibles
arising on acquisition	12.7	14.9
	45.0	142.3
Unrealised mark to market of derivative financial instruments	1.1	(6.6)
Interest on EU state aid receivable	(1.4)	–
Tax credit in relation to adjusting items	(8.4)	(8.3)
	36.3	127.4

A number of items have been recorded under ‘adjusting items’

by virtue of their size and/or one time nature, in line with our

accounting policy in Note 1, in order to provide additional useful

analysis of the Group’s results. The Group considers the adjusted

results to be an important measure used to monitor how the

businesses are performing as they achieve consistency and

comparability between reporting periods. The net impact of

these items on the Group profit before tax for the year is a debit

of $44.7m (2022: $135.7m). The items fall into a number of

categories, as summarised below:

Business transformation – In November 2020, the closure of

the Charleston plant was announced. Costs of $0.7m ($2.9m in

2022) associated with the closure of the site are classified as

an adjusting item and the site is planned to be disposed of in

the future. Since November 2020, $23.4m has been incurred

in relation to the closure of the site.

In September 2023, the Fit for Future organisation restructuring

programme was announced, for which a restructuring provision

of $25.4m was recognised in 2023; reflecting the discounted

future expected cash outflows for the programme. Total estimated

costs for the programme are $31.3m, of which $5.4m was utilised

in 2023. The programme is expected to be completed in 2025.

Environmental provisions – The Group’s environmental

provision is calculated on a discounted cash flow basis, reflecting

the time period over which spending is estimated to take place.

The movement in the provision relates changes in discount rates

which has resulted in the reduction of $0.4m to the liability

(2022: $7.2m), and extra remediation work identified in the

year which has resulted in a $6.6m increase to the liability

(2022: $3.4m). As these costs relate to non-operational facilities

they are classified as adjusting items.

Impairment of property, plant and equipment – In 2022 the

Group recognised a non-cash $23.0m impairment in respect of

non-operational bioleaching property, plant and equipment in the

Talc business. The Group determined that the operational, health

and safety and financial commitments required to operate the

equipment were not the best use of the Group’s resources.

Impairment of goodwill – In 2022, the performance of the Talc

business was adversely impacted by a lower demand environment,

global inflationary pressures, higher energy costs and the Russian

invasion of Ukraine. These factors, as well as a reduction in the

near term forecasted profitability of the Talc business and a rise

in the pre-tax discount rate resulted in an impairment charge of

$103.4m being recognised in 2022.

Amortisation of intangibles arising on acquisition –

Amortisation of $12.7m (2022: $14.9m) represents the charge in

respect of the Group’s acquired intangible assets. As in previous

years, these are included in adjusting items as they are a non-cash

charge arising from historical investment activities.

Unrealised mark to market of derivatives – The unrealised

movements in the mark to market valuation of financial instruments

that are not in hedging relationships are treated as adjusting items

as they are unrealised non-cash fair value adjustments that will not

affect the cash flows of the Group.

Interest on EU state aid receivables – Finance income of

$1.4m has been recognised in respect of interest due to the

Group if the EU state aid case settles in favour of the Group.

Refer to Note 30 for further details on the tax recoverable asset.

Tax on adjusting items – this is the net impact of tax relating to

the adjusting items listed above.

Notes to the consolidated financial statements

continued

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5. Adjusting items continued

To support comparability with the financial statements as presented in 2023, a reconciliation to the adjusted consolidated income

statement is shown below.

			2023
	2023	2023	Adjusted
	Profit	Adjusting	profit
	and loss	items	and loss
	$m	$m	$m
Revenue	713.4	–	713.4
Cost of sales	(429.1)	–	(429.1)
Gross profit	284.3	–	284.3
Distribution costs	(108.7)	–	(108.7)
Administrative expenses	(116.7)	45.0	(71.7)
Operating profit	58.9	45.0	103.9
Other expenses	(2.3)	–	(2.3)
Finance income	4.4	(1.4)	3.0
Finance costs	(21.3)	1.1	(20.2)
Profit before income tax	39.7	44.7	84.4
Tax	(11.5)	(8.4)	(19.9)
Profit from continuing operations	28.2	36.3	64.5
Earnings per share
From continuing operations
Basic earnings (cents)	4.8	6.2	11.0
Diluted earnings (cents)	4.7	6.1	10.8

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5. Adjusting items continued

			2022
	2022	2022	Adjusted
	Profit	Adjusting	profit
	and loss	items	and loss
	$m	$m	$m
Revenue	736.4	–	736.4
Cost of sales	(4 37.5)	–	(437. 5)
Gross profit	298.9	–	298.9
Distribution costs	(125.0)	–	(125.0)
Administrative expenses	(215.7)	142.3	(73.4)
Operating (loss)/profit	(41.8)	142.3	100.5
Other expenses	(1.3)	–	(1.3)
Finance income	9.9	(6.6)	3.3
Finance costs	(21.6)	–	(21.6)
(Loss)/profit before income tax	(54.8)	135.7	80.9
Tax	(7.8)	(8.3)	(16.1)
(Loss)/profit from continuing operations	(62.6)	127.4	64.8
Earnings per share
From continuing operations
Basic (loss)/earnings (cents)	(10.7)	21.8	11.1
Diluted (loss)/earnings (cents)	(10.7)	21.6	10.9

Notes to the consolidated financial statements

continued

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5. Adjusting items continued

To support comparability with the financial statements as presented in 2023, a reconciliation from operating profit/(loss) to adjusted

operating profit/(loss) by segment is shown below for each year.

				2023
			Performance
			Specialties	Personal	Segment	Central
	Coatings	Talc	totals	Care	totals	costs	Total
	$m	$m	$m	$m	$m	$m	$m
Operating profit/(loss)	55.2	8.6	63.8	43.2	107.0	(48.1)	58.9
Adjusting items:
Business transformation	0.7	–	0.7	–	0.7	25.4	26.1
Increase in environmental
provisions due to additional
remediation work identified	–	–	–	–	–	6.6	6.6
Decrease in environmental provisions
due to change in discount rate	–	–	–	–	–	(0.4)	(0.4)
Amortisation of intangibles
arising on acquisition	0.2	5.4	5.6	7.1	12.7	–	12.7
Adjusted operating profit/(loss)	56.1	14.0	70.1	50.3	120.4	(16.5)	103.9

				2022
			Performance
			Specialties	Personal	Segment	Central
	Coatings	Talc	totals	Care	totals	costs	Total
	$m	$m	$m	$m	$m	$m	$m
Operating profit/(loss)	69.2	(134.0)	(64.8)	44.4	(20.4)	(21.4)	(41.8)
Adjusting items:
Business transformation	2.9	1.9	4.8	–	4.8	–	4.8
Increase in environmental
provisions due to additional
remediation work identified	–	–	–	–	–	3.4	3.4
Decrease in environmental provisions
due to change in discount rate	–	–	–	–	–	( 7. 2)	(7. 2)
Impairment of property, plant and equipment	–	23.0	23.0	–	23.0	–	23.0
Impairment of goodwill	–	103.4	103.4	–	103.4	–	103.4
Amortisation of intangibles
arising on acquisition	1.2	5.3	6.5	8.4	14.9	–	14.9
Adjusted operating profit/(loss)	73.3	(0.4)	72.9	52.8	125.7	(25.2)	100.5

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6. Income tax expense

	2023	2022
	$m	$m
Current tax:
UK corporation tax	6.2	11. 2
Overseas corporation tax	8.7	6.5
Adjustments in respect of prior years:
United Kingdom	(0.7)	(0.6)
Overseas	(3.0)	(3.8)
Total current tax	11.2	13.3
Deferred tax:
United Kingdom	(0.2)	3.1
Overseas	(1.6)	(8.4)
Adjustment in respect of prior years:
United Kingdom	–	–
Overseas	2.1	(0.2)
Total deferred tax	0.3	(5.5)
Income tax expense for the year	11.5	7.8
Comprising:
Income tax expense for the year	11.5	7.8
Adjusting items 1 :
Overseas taxation on adjusting items	(4.0)	(6.3)
UK taxation on adjusting items	(4.4)	(2.0)
Taxation on adjusting items	(8.4)	(8.3)
Income tax expense for the year after adjusting items	19.9	16.1

1 See Note 5 for details of adjusting items.

The tax charge on profits represents an effective rate of 29.0% (2022: 14.2%) and an effective tax rate after adjusting items of 23.5%

(2022: 20.0%).

The tax impact of the adjusting items outlined within Note 5 and within the consolidated income statement relates to the following:

	2023	2023	2022	2022
	Gross	Tax impact	Gross	Tax impact
	$m	$m	$m	$m
Business transformation	26.1	5.2	4.8	1.1
Environmental provisions	6.2	1.3	(3.8)	(0.7)
Impairment of property, plant and equipment	–	–	23.0	4.9
Impairment of goodwill	–	–	103.4	–
Mark to market of derivative financial instruments	1.1	0.2	(6.6)	(1.3)
Interest on EU state aid receivable	(1.4)	(0.4)	–	–
Amortisation of intangibles arising on acquisition	12.7	2.1	14.9	2.9
Reversal of uncertain tax provision	–	–	–	1.4
Tax charge	44.7	8.4	135.7	8.3

The Group is international and has operations across a range of jurisdictions. Accordingly, tax charges of the Group in future periods will

be affected by the profitability of operations in different jurisdictions and changes to tax rates and regulations in the jurisdictions within

which the Group has operations. The Group’s adjusted effective tax rate in 2023 is higher than the prior year due to an increase in the

UK corporation tax rate to 25% from April 2023. The medium-term expectation for the Group’s adjusted effective tax rate is around 26%.

Notes to the consolidated financial statements

continued

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6. Income tax expense continued

On 20 December 2021 the OECD published its Global Anti-Base Erosion Model Rules (Pillar Two). The report provided a model for a

coordinated system of taxation that imposes a top-up tax on profits arising in a jurisdiction whenever the effective tax rate, determined

on a jurisdictional basis, is below the minimum tax rate of 15%. The UK enacted legislation to enshrine this into domestic law in July 2023.

The Group is below the revenue threshold for the legislation to apply and therefore there is no impact on the financial statements.

The total charge for the year can be reconciled to the accounting profit as follows:

	2023	2023	2022	2022
	$m	%	$m	%
Profit/(loss) before tax	39.7		(54.8)
Tax at 23.5% (2022: 19.00%)	9.4	23.5	(10.4)	(19.0)
Difference in overseas effective tax rates	1.9	4.9	2.3	4.2
Income not taxable	–	–	(0.4)	(0.7)
Expenses not deductible for tax purposes	7.1	17.9	21.8	39.7
Adjustments in respect of prior years	(1.5)	(3.7)	(4.6)	(8.4)
Tax rate changes	–	–	0.2	0.4
Tax associated with disposal of discontinued operations	(12.8)	(32.2)	–	–
Movement in unrecognised deferred tax	7.4	18.6	(1.1)	(2.0)
Total charge and effective tax rate for the year	11.5	29.0	7. 8	14.2

7. Profit/(loss) from continuing operations

Profit from continuing operations of $28.2m (2022: loss of $62.6m) has been arrived at after charging/(crediting):

2023

2022

Employee costs (see Note 8) 131.2 13 3.1

Net foreign exchange gains (0.6) (1.3)

Research and development costs 7.8 8 .1

	Depreciation of property, plant and equipment	41.6	41.2
	Amortisation of intangible assets	13.3	15.4
Total depreciation and amortisation expense		54.9	56.6
(Loss)/profit on disposal of property, plant and equipment		(0.8)	0.3
Write off of inventory		4.6	3.0
Cost of inventories recognised as expense		295.9	302.9
Fees payable to company’s auditors and its associates:
Audit of company		1.2	1.4
Audit of subsidiaries		0.9	1.0
Audit related services – interim review		0.3	0.3
1	Includes auditing of the financial statements.

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8. Employees

Employee costs:

	2023	2022
	$m	$m
Wages and salaries	110.4	113.2
Social security costs	9.0	9.6
Pension costs	7.4	7.2
Share based payment costs	4.4	3 .1
Total employee costs	131.2	13 3.1

Average number of FTE employees

	2023	2022
	Number	Number
Personal Care and Coatings	1,031	1,076
Talc	228	235
Central	19	17
Total	1,278	1,328

1 Full time equivalent includes contractors.

The aggregate amount of Directors’ remuneration (salary, bonus

and benefits) is shown in the Remuneration Report on page 112:

The aggregate amount of gains made by Directors on exercise

of share options was $nil (2022: $nil).

The remuneration of the highest paid Director was $3.4m

(2022: $2.7m).

Payments have been made to a defined contribution

pension scheme on behalf of 1 Director (2022: 1 Director).

For the highest paid Director, pension contributions of

$0.2m (2022: $0.2m) were made.

9. Earnings per share

The calculation of the basic and diluted earnings per share

attributable to the ordinary equity holders of the parent is

based on the following:

Earnings:

	2023	2022
	$m	$m
Adjusted earnings	64.5	64.8
Adjusting items net of tax	(36.3)	(127.4)
Earnings/(loss) for the purpose
of basic earnings per share	28.2	(62.6)
(Loss)/earnings from discontinued operations	(1.7)	11.5
Earnings/(loss) from continuing and discontinued operations	26.5	(51.1)

Number of shares:

	2023	2022
	m	m
Weighted average number of shares for the purposes of basic
earnings per share	585.7	582.6
Effect of dilutive share options	11.2	9.7
Weighted average number of shares for the purposes of diluted earnings per share	596.9	592.3

The dilutive (loss)/earnings per share calculation for 2022 in the

table below, does not include the impact of the 9.7m dilutive share

options, as the inclusion of these potential shares would have an

anti-dilutive impact on the diluted loss per share from continuing

operations; it would decrease the diluted loss per share from

continuing operations.

Earnings per share:

	2023	2022
	cents	cents
Earnings per share from continuing operations:
Basic earnings/(loss)	4.8	(10.7)
Diluted earnings/(loss)	4.7	(10.7)
Basic after adjusting items	11.0	11.1
Diluted after adjusting items	10.8	10.9
Earnings per share from discontinued operations:
Basic (loss)/earnings from discontinued operations	(0.3)	2.0
Diluted (loss)/earnings from discontinued operations	(0.3)	2.0
Earnings per share
from continuing and discontinued operations:
Basic earnings/(loss) from continuing and discontinued operations	4.5	(8.8)
Diluted earnings/(loss) from continuing and discontinued operations	4.4	(8.8)

Notes to the consolidated financial statements

continued

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10. Goodwill and other intangible assets

				Other
			Customer	intangible
	Goodwill	Brand	lists	assets	Total
	$m	$m	$m	$m	$m
Cost:
At 1 January 2022	725.6	26.9	166.4	104.6	1,023.5
Exchange differences	(26.2)	(1.6)	(3.2)	(3.3)	(34.3)
Additions	–	–	–	0.2	0.2
Transferred to assets held for sale	–	–	–	(2.6)	(2.6)
At 31 December 2022	699.4	25.3	163.2	98.9	986.8
Exchange differences	12.8	0.1	1.8	2.5	17.2
Additions	–	–	–	0.1	0.1
At 31 December 2023	712.2	25.4	165.0	101.5	1,004.1
Amortisation and impairment:
At 1 January 2022	112.6	3.2	39.6	52.4	207.8
Exchange differences	2.5	(0.7)	(1.9)	1.4	1.3
Charge for the year	–	–	8.8	6.9	15.7
Impairment	103.4	–	–	–	103.4
Transferred to assets held for sale	–	–	–	(1.6)	(1.6)
At 31 December 2022	218.5	2.5	46.5	59.1	326.6
Exchange differences	11.4	–	1.5	0.7	13.6
Charge for the year	–	–	8.6	4.7	13.3
Impairment	–	–	–	–	–
At 31 December 2023	229.9	2.5	56.6	64.5	353.5
Carrying amount:
At 31 December 2023	482.3	22.9	108.4	37.0	650.6
At 31 December 2022	480.9	22.8	116.7	39.8	660.2
At 1 January 2022	613.0	23.7	126.8	52.2	815.7

The net book value of customer lists includes $82.6m (2022: $89.3m) in relation to the acquisition of SummitReheis which have remaining

lives of between 3 and 18 years (2022: between 4 and 19 years) and $25.9m (2022: $27.5m) in relation to the acquisition of Mondo

Minerals which have remaining lives of 10 years (2022: 11 years).

The brand intangibles represent the value ascribed to the trading name and reputation of the Deuchem, Fancor, Watercryl, Hi-Mar and

SummitReheis acquisitions. The Group, with the exception of SummitReheis, considers these to have significant and ongoing value to

the business that will be maintained and it is therefore considered appropriate to assign these assets an indefinite useful life. The brand

relating to SummitReheis has been amortised over a period of three years, and is fully amortised.

The carrying amount of brand intangibles with an indefinite useful life is $22.9m (2022: $22.8m). Brand intangibles with an indefinite

useful life are tested annually for impairment as part of the annual goodwill impairment test and have been allocated to the Personal

Care and Coatings CGUs.

Included within other intangible assets above are technology related intangible assets of $28.3m (2022: $30.1m) arising from the

acquisition of Mondo Minerals which have remaining useful lives of 10 years (2022: 11 years), and know how related intangible assets

of $4.5m (2022: $6.2m) which have remaining useful lives of between 3 and 4 years (2022: 4 and 5 years).

The remaining intangible assets comprise the value ascribed to customer lists, patents and non-compete clauses, which are being

amortised over periods of 5 to 24 years.

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Notes to the consolidated financial statements

continued

10. Goodwill and other intangible assets

continued

Goodwill and brand intangibles with an indefinite useful life

impairment testing

Goodwill and brand intangibles with an indefinite useful life are

allocated to the Group’s cash-generating units (CGUs) as follows:

	2023	2022
	$m	$m
Personal Care	296.6	296.0
Coatings	208.6	2 07.7
At 31 December	505.2	503.7

The Group tests annually for impairment at 31 October, or more

frequently, if there are events or circumstances that indicate that

the carrying amount may not be recoverable.

Basis of the recoverable amount

The recoverable amounts of the Group’s CGUs are determined

from value in use calculations which use cash flow projections

based on financial budgets approved by the directors covering

a five year period.

Management’s judgement in estimating the cash flows of a CGU

The key assumptions for the value in use calculations are expected

changes to sales volumes, selling prices and direct costs during

the forecast period, growth rates used to extrapolate beyond the

forecast period and the discount rates applied to the resulting cash

flows. Changes in sales volumes, selling prices and direct costs

are based on past practices and expectations of future changes

in the market. A 5 year forecasting model is used for all CGUs.

Growth rates

Cash flows for periods beyond the forecast period are extrapolated

based on estimated long-term growth rates. The rates do not

exceed the average long-term growth rate for the relevant

products or markets.

Discount rates

Management estimates discount rates using pre-tax rates that

reflect current market assessments of the time value of money

and the risks specific to the CGUs.

Personal Care

The recoverable amount of the CGU was calculated using forecast

cash flows based on budgets and plans for 2024 to 2028,

a pre-tax discount rate of 12.8% (2022: 12.0%) and a long-term

growth rate of 5.0% (2022: 5.0%) based on the long term

historical growth rate seen in this CGU. The recoverable amount

exceeded the carrying value of the CGU by $211.7m (2022:

$230.9m). The Directors do not consider that any reasonably

possible changes to the key assumptions would reduce the

recoverable amount to its carrying value.

Coatings

The recoverable amount of the CGU was calculated using forecast

cash flows based on budgets and plans for 2024 to 2028,

a pre-tax discount rate of 12.4% (2022: 11.9%) and a long-term

growth rate of 3.0% (2022: 3.0%). The recoverable amount

exceeded the carrying value of the CGU by $402.1m (2022:

$531.8m). The Directors do not consider that any reasonably

possible changes to the key assumptions would reduce the

recoverable amount to its carrying value.

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11. Property, plant and equipment

						Right-of-use assets
			Fixtures				Fixtures
	Land and	Plant and	fittings and	Under	Land and	Plant and	fittings and
	buildings	machinery	equipment	construction	buildings	machinery	equipment	Total
	$m	$m	$m	$m	$m	$m	$m	$m
Cost:
At 1 January 2022	127.1	680.6	43.8	45.1	53.7	6.0	2.9	959.2
Additions	–	13.5	–	33.4	4.0	0.8	0.5	52.2
Exchange differences	(5.0)	(25.1)	(1.4)	(1.6)	(0.9)	(0.3)	–	(34.3)
Disposals	–	(5.7)	(0.2)	–	(1.5)	(1.5)	–	(8.9)
Reclassifications	1.6	33.5	1.6	(36.7)	–	–	–	–
Transferred to assets
held for sale	(34.0)	(186.2)	(11.7)	(7.3)	–	(0.8)	(0.6)	(240.6)
At 31 December 2022	89.7	510.6	32.1	32.9	55.3	4.2	2.8	727.6
Additions	1.5	62.3	0.1	2.7	4.1	0.3	0.7	71.7
Exchange differences	1.8	13.3	0.1	0.2	0.5	0.1	0.2	16.2
Disposals	(0.8)	(6.4)	(0.3)	–	(5.5)	(2.3)	(1.9)	(17.2)
Reclassifications	7.9	15.1	0.5	(23.5)	–	–	–	–
At 31 December 2023	100.1	594.9	32.5	12.3	54.4	2.3	1.8	798.3
Accumulated
depreciation and impairment losses:
At 1 January 2022	66.4	330.3	34.8	–	23 .1	2.8	2.1	459.5
Charge for the year	2.6	39.6	1.6	–	4.1	0.9	0.5	49.3
Exchange differences	(2.5)	(10.9)	(0.7)	–	(0.3)	–	–	(14.4)
Disposals	–	(4.9)	(0.2)	–	(0.7)	(0.1)	–	(5.9)
Impairment losses	–	23.0	–	–	–	–	–	23.0
Reclassifications	0.4	3.2	(3.6)	–	–	–	–	–
Transferred to assets
held for sale	(26.4)	(134.3)	(8.6)	–	–	(0.6)	(0.4)	(170.3)
At 31 December 2022	40.5	246.0	23.3	–	26.2	3.0	2.2	341.2
Charge for the year	2.1	33.0	1.2	–	4.1	0.9	0.3	41.6
Exchange differences	1.2	6.1	0.1	–	0.3	0.1	–	7.8
Disposals	(0.8)	(6.1)	(0.2)	–	(4.9)	(2.3)	(1.6)	(15.9)
Impairment losses	–	–	–	–	–	–	–	–
Reclassifications	–	1.0	(1.0)	–	–	–	–	–
At 31 December 2023	43.0	280.0	23.4	–	25.7	1.7	0.9	374.7
Net book value:
At 31 December 2023	57.1	314.9	9.1	12.3	28.7	0.6	0.9	423.6
At 31 December 2022	49.2	264.6	8.8	32.9	29.1	1.2	0.6	386.4
At 1 January 2022	60.7	350.3	9.0	45.1	30.6	3.2	0.8	499.7

Group capital expenditure contracted but not provided for in these financial statements amounted to $nil (2022: $nil).

In 2022, the Group recognised a $23.0m non-cash impairment of the non-operational bioleaching property, plant and equipment

acquired as part of the Mondo Minerals acquisition, impairing the asset to a nil carrying value. The impairment was a result of the Group

concluding that the operational, health and safety and financial commitments required to operate the equipment were not the best use

of the Group’s resources.

In 2023 and 2022, the Group reclassified items of property, plant and equipment from under construction to their relevant categories

upon the assets becoming available for use.

In 2023, additions for the year included $28.4m related to the non-cash rehabilitation and closure provisions (see Note 15).

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12. Inventories

	2023	2022
	$m	$m
Raw materials and consumables	43.9	55.4
Work in progress	7.2	10.7
Finished goods and goods
purchased for resale	112.2	115.9
At 31 December	163.3	182.0

Inventories are disclosed net of provisions for obsolescence of

$6.1m (2022: $5.6m).

13. Trade and other receivables

	2023	2022
	$m	$m
Trade receivables	80.1	77.5
Other receivables	13.5	10.4
Prepayments	8.2	7.0
At 31 December	101.8	94.9

The Group entered into an accounts receivable purchase

programme. The net balance outstanding in relation to this

programme was $19.8m (2022: $22.6m).

14. Trade and other payables

	2023	2022
	$m	$m
Trade payables	60.5	74.0
Other payables	14.2	13.5
Accruals	43.2	47.9
At 31 December	117.9	135.4

The Group entered into supplier financing arrangements with

Santander and US Bank. At the end of the period the net balance

outstanding on the Santander facility was $nil (2022: $nil)

and the net balance outstanding on the US bank facility was

$0.8m (2022: $0.5m).

15. Provisions

	Environmental	Self insurance	Restructuring	Other	Total
	$m	$m	$m	$m	$m
At 1 January 2023	27.5	0.5	0.6	1.1	29.7
Increase/(decrease) in provisions	34.6	0.5	25.4	–	60.4
Unused amounts reversed	–	–	(0.6)	(0.4)	(1.0)
Unwinding of discount	1.5	–	–	–	1.5
Utilised during the year	(4.4)	(0.5)	(5.4)	–	(10.3)
Currency translation differences	1.3	–	0.1	0.1	1.5
At 31 December 2023	60.5	0.5	20.1	0.8	81.9
Due within 1 year	4.5	0.3	15.9	0.8	21.5
Due after 1 year	56.0	0.2	4.2	–	60.4

Environmental provisions include restoration provisions relating to manufacturing and distribution sites including certain sites no longer

owned by the Group, as well as rehabilitation and closure provisions related to the mining activities of the Talc business.

Restoration provisions have been derived using a discounted cash flow methodology and reflect the extent to which it is probable that

expenditure will be incurred over the next 25 years. The level of these provision are based on management’s best estimate of the most

likely outcome for each individual exposure. These provisions are discounted using discount rates which reflect market assessments

and the risks specific to the liabilities. The discount rates used were 4.0% in the US, 4.1% in the UK and 3.0% in Canada. Included

within these provisions are amounts in respect of all anticipated costs related to the closure and remediation of the Eaglescliffe site.

Rehabilitation and closure provisions have been derived using a discounted cash flow methodology and reflects management’s best

estimate of the current obligation for restoration and closure of mining sites in Finland, excluding passive mines, in line with latest best

practice guidelines and Finnish mining regulatory guidelines. The provisions will not be utilised until the mines are closed. The provisions

are discounted using discount rates which reflect market assessments and the risks specific to the liabilities. The discount rate used

was 2.7%.

The following table shows the timeframes over which undiscounted costs in relation to all environmental provisions are expected to

be incurred:

	1-10 years	11-20 years	20-25 years	25+ years	Total
	$m	$m	$m	$m	$m
Environmental provisions	46.8	29.3	12.4	13 .1 101.6

Notes to the consolidated financial statements

continued

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15. Provisions continued

Additional environmental provisions of $35.0m were recognised due to extra remediation and rehabiliation work identified during the year,

which was offset by a reduction of $0.4m due to changes in the discount rates used. $6.2m of overall increase in provisions is included

within adjusting items (see Note 5) with $28.4m included as an addition to property, plant and equipment (see Note 11). If the cost

estimates on which the provisions are based were to change by 10%, which is reasonably possible, the provisions recognised would

increase by approximately $5.9m.

Whilst a range of outcomes is possible, the Directors believe that the reasonably possible range for the environmental provision is from

$59.6m to $66.9m.

Self-insurance provisions relate to personal injury and other claims from former employees or third parties and represent the aggregate

of outstanding claims plus a projection of losses incurred but not yet reported which together make up the full liability recognised as

a provision. Insurance recoveries are recognised as a separate reimbursement asset. The self-insurance provisions are expected to

be utilised within five years.

Restructuring provisions relate to costs of adjusting head count and other costs of restructuring where a need to do so has been

identified by management. Additional restructuring provisions of $25.4m were recognised due costs related to the Fit for the Future

programme which was announced during the year. This additional restructuring provision is included within adjusting items (see Note 5).

The additional restructuring provisions are based on management’s best estimate of the cash outflow required to settle the obligation.

The restructuring provisions are discounted using discount rates which reflect market assessments and the risks specific to the liability

in the jurisdiction in which the provision has been recognised. If the cost estimates on which the additional restructuring provisions are

based were to change by 10%, which is reasonably possible, the provision recognised would increase by approximately $2.5m.

16. Deferred tax

		Accelerated	Amortisation	Other	Other
	Retirement	tax	of US	intangible	temporary	Unrelieved
	benefit plans	depreciation	goodwill	assets	differences	tax losses	Total
	$m	$m	$m	$m	$m	$m	$m
At 1 January 2022	(12.4)	(42.8)	(63.4)	(31.4)	20.1	7.9	(122.0)
Credit/(charge) to the income statement	–	(0.1)	0.4	2.0	0.6	1.5	4.4
Credit to other comprehensive income	5.3	–	–	–	0.8	–	6 .1
Credit to retained earnings	–	–	–	–	0.4	–	0.4
Currency translation differences	1.7	(0.1)	–	1.5	(0.2)	0.2	3.1
Transferred to assets/(liabilities)
held for sale	(0.7)	8.7	–	–	(6.5)	–	1.5
At 31 December 2022	(6.1)	(34.3)	(63.0)	(27.9)	15.2	9.6	(106.5)
(Charge)/credit to the income statement	(0.5)	(4.8)	0.2	2.0	0.8	(6.1)	(8.4)
(Charge)/credit to other comprehensive income	(2.8)	–	–	–	(0.6)	–	(3.4)
Credit to retained earnings	–	–	–	–	(1.4)	–	(1.4)
Disposal	–	3.2	–	–	–	–	3.2
Currency translation differences	(0.3)	(3.7)	–	(0.7)	2.4	(0.3)	(2.6)
At 31 December 2023	(9.7)	(39.6)	(62.8)	(26.6)	16.4	3.2	(119.1)
Deferred tax assets	–	–	–	–	16.4	3.2	19.6
Deferred tax liabilities	(9.7)	(39.6)	(62.8)	(26.6)	–	–	(138.7)

Deferred tax assets have been recognised to the extent that it is considered more likely than not that there will be taxable profits from

which the future reversal of the underlying timing differences can be deducted. Where this is not the case, deferred tax assets have not

been recognised.

Deferred tax liabilities are reduced for any deferred tax assets which exist within a jurisdiction where consolidated tax returns are filed

and where tax assets and liabilities may be netted.

At the balance sheet date the aggregate amount of the temporary differences in relation to the investment in subsidiaries for which

deferred tax liabilities have not been recognised was $30.9m (2022: $37.9m). No liability has been recognised in respect of these

differences because the Group is in a position to control the timing of the reversal of the temporary differences and the Group considers

that it is probable that such differences will not reverse in the foreseeable future. As at the balance sheet date the Group had an

unrecognised deferred tax asset of $4.5m (gross $21.4m) (2022: $4.5m (gross $21.4m)) in relation to restricted US interest deductions,

an unrecognised deferred tax asset of $4.9m (gross $24.6m) (2022: $3.8m (gross $18.9m)) in relation to restricted Finnish interest

deductions and an unrecognised deferred tax asset of $11.1m (gross $33.7m) (2022: $8.6m (gross $26.1m)) in respect of German

net operating losses.

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17. Share capital

	2023	2022
	$m	$m
At 1 January	52.3	52.2
Issue of shares	0.2	0.1
At 31 December	52.5	52.3

At 31 December 2023, the Group held 1,458,404 (2022: 258,404) Elementis plc shares through the Employee Share Options Trust with

a value of $1.8m (2022: $0.2m). These shares are held to settle share options and awards granted to employees. Refer to Note 26 for

further details.

18. Other reserves

	Capital			Share
	redemption	Translation	Hedging	options
	reserve	reserve	reserve	reserve	Total
	$m	$m	$m	$m	$m
At 1 January 2022	158.8	(67.7 )	(8.6)	8.2	90.7
Share based payments	–	–	–	3.4	3.4
Exchange differences	–	(54.7)	–	(0.9)	(55.6)
Fair value of cash flow hedges transferred to the income statement	–	–	1.6	–	1.6
Effective portion of changes in fair value of cash flow hedges	–	–	(2.6)	–	(2.6)
Fair value of cash flow hedges transferred to net assets	–	–	0.8	–	0.8
Transfer	–	–	7.8	(4.0)	3.8
At 31 December 2022	158.8	(122.4)	(1.0)	6.7	42.1
Share based payments	–	–	–	4.2	4.2
Exchange differences	–	9.7	–	0.2	9.9
Fair value of cash flow hedges transferred to the income statement	–	–	12.7	–	12.7
Effective portion of changes in fair value of cash flow hedges	–	–	(6.3)	–	(6.3)
Fair value of cash flow hedges transferred to net assets	–	–	0.5	–	0.5
Recycle deferred foreign exchange losses on disposal	–	9.3	–	–	9.3
Transfer	–	–	–	(2.3)	(2.3)
At 31 December 2023	158.8	(103.4)	5.9	8.8	70.1

The Company can redeem shares by repaying the market value to the shareholder, whereupon the shares are cancelled. Redemption

must be from distributable profits. The capital redemption reserve represents the nominal value of the shares redeemed.

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign

operations as well as from the translation of liabilities that hedge the Company’s net investment in a foreign subsidiary.

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments

related to hedged transactions that have not yet occurred. The transfer from the hedging reserve to retained earnings is as a result

of adjusting the hedging reserve to reflect the balance of open cash flow hedges at the end of the year.

The share options reserve comprises amounts accumulated in equity in respect of share options and awards granted to employees.

The transfers from the share options reserve to retained earnings is as a result of the exercise and expiry of share options and awards

during the year.

Notes to the consolidated financial statements

continued

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19. Borrowings

	2023	2022
	$m	$m
Bank loans	267.8	419.0
Unamortised syndicate loan fees	(3.1)	(4.3)
Short-term borrowings	–	2.7
Carrying value of borrowings at 31 December	264.7	417.4
The borrowings are repayable as follows:
Within one year	71.6	2.7
Within two to four years	196.2	419.0
In the fifth year	–	–
	267.8	421.7

The weighted average interest rates paid were as follows:

	2023	2022
	%	%
Bank loans	5.8	3.0

Group borrowings were denominated as follows:

	2023	2022
	$m	$m
US dollar	110.0	233.1
Euro	157.8	185.9
Total bank loans	267.8	419.0

The Group’s bank loans include term loans and a revolving credit facility (“RCF”). The term loans mature in June 2026. $71.6m of the

RCF matures in September 2024 and $303.4m in September 2025.

The US dollar borrowings comprised of a fully drawn $100.0m term loan (2022: $150.0m) and $10.0m of RCF drawings (2022: $83.1m).

The euro borrowings comprised a fully drawn €142.9m term loan (2022: €142.9m) and €nil of RCF drawings (2022: €31.4m).

The RCF and term loans are governed by the Group’s bank syndicate facilities agreement, under which certain Group entities act as

guarantors. The guarantors to the facilities agreement are required to constitute at least 75% of the Group’s total fixed assets plus

current assets less current liabilities and 75% of the Group’s profits before interest expense and tax.

Each guarantor irrevocably and unconditionally jointly and severally guarantees the punctual performance under the Group’s bank

syndicate facilities agreement. There are no fixed or floating charges over assets.

20. Cash and cash equivalents

Cash and cash equivalents for the purpose of the consolidated cash flow statement comprise the following:

	2023	2022
	$m	$m
Cash at bank and on hand at 31 December	65.8	54.9

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21. Financial instruments

		Held at fair value	Held at amortised cost
	Through	Derivatives
	profit	used for	Loans and		Total	Total
	and loss	hedging	receivables	Liabilities	book value	fair value
At 31 December 2023:	$m	$m	$m	$m	$m	$m
Current:
Trade and other receivables (see Note 13)	–	–	93.6	–	93.6	93.6
Derivative financial instruments (see Note 22)	–	7.4	–	–	7. 4	7.4
Cash and cash equivalents (see Note 20)	–	–	65.8	–	65.8	65.8
Non-current:
Derivative financial instruments (see Note 22)	–	6.0	–	–	6.0	6.0
Financial assets	–	13.4	159.4	–	172.8	172.8
Current:
Bank overdrafts and loans (see Note 19)	–	–	–	–	–	–
Trade and other payables (see Note 14)	–	–	–	(117.9)	(117.9)	(117.9)
Derivative financial instruments (see Note 22)	–	–	–	–	–	–
Lease liabilities (see Note 24)	–	–	–	(5.9)	(5.9)	(5.9)
Non-current:
Loans and borrowings 2 (see Note 19)	–	–	–	(264.7)	(264.7)	(267.8)
Lease liabilities (see Note 24)	–	–	–	(30.3)	(30.3)	(30.3)
Derivative financial instruments (see Note 22)	–	(2.1)	–	–	(2.1)	(2.1)
Financial liabilities	–	(2.1)	–	(418.8)	(420.9)	(424.0)
Total	–	11.3	159.4	(418.8)	(248.1)	(251.2)

		Held at fair value	Held at amortised cost
	Through	Derivatives
	profit	used for	Loans and		Total	Total
	and loss	hedging	receivables	Liabilities	book value	fair value
At 31 December 2022:	$m	$m	$m	$m	$m	$m
Current:
Trade and other receivables (see Note 13)	–	–	87.9	–	87.9	87. 9
Derivative financial instruments (see Note 22)	6.9	3.8	–	–	10.7	10.7
Cash and cash equivalents (see Note 20)	–	–	54.9	–	54.9	54.9
Non-current:
Derivative financial instruments (see Note 22)	–	1.3	–	–	1.3	1.3
Financial assets	6.9	5.1	142.8	–	154.8	154.8
Current:
Bank overdrafts and loans (see Note 19)	–	–	–	(2.7)	(2.7)	(2.7)
Trade and other payables (see Note 14)	–	–	–	(135.4)	(135.4)	(135.4)
Derivative financial instruments (see Note 22)	(0.5)	(2.8)	–	–	(3.3)	(3.3)
Lease liabilities (see Note 24)	–	–	–	(6.1)	(6.1)	(6.1)
Non-current:
Loans and borrowings 2 (see Note 19)	–	–	–	(414.7)	(414.7)	(419.0)
Lease liabilities (see Note 24)	–	–	–	(30.2)	(30.2)	(30.2)
Derivative financial instruments (see Note 22)		(2.8)	–	–	(2.8)	(2.8)
Financial liabilities	(0.5)	(5.6)	–	(5 8 9.1)	(595.2)	(599.5)
Total	6.4	(0.5)	142.8	(589.1)	(440.4)	(444.7)

1 Derivatives in an asset and liability position at 31 December 2023 and 31 December 2022 are shown within current or non current financial assets and current or

non current financial liabilities in the consolidated balance sheet.

2 The total book value of loans and borrowings are shown net of facility fees of $3.1m (2022: $4.3m).

Notes to the consolidated financial statements

continued

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21. Financial instruments continued

Fair values measurement and hierarchy

Basis for determining fair values

The Group measures fair values in respect of financial instruments

in accordance with IFRS 13, using the following fair value hierarchy

that reflects the significance of the inputs used in making the

measurements:

Level 1: Quoted market price (unadjusted) in an active market

for an identical instrument.

Level 2: Valuation techniques based on observable inputs,

either directly or indirectly.

Level 3: Valuation techniques using significant unobservable

inputs. This category includes contingent consideration.

The following summarises the significant methods and

assumptions used in estimating the fair values of

financial instruments:

The Group assesses that the fair values of cash and cash

equivalents, trade and other receivables, trade and other

payables, and the current portion of floating rate bank and other

borrowings, approximate to book values due to the short maturity

periods of these financial instruments. For trade and other

receivables, allowances are made within their book value for credit

risk. The fair values of lease liabilities approximate to their book

values due to the measurement of lease liabilities at the Group’s

incremental borrowing rate, which has not changed significantly

since the inception of the lease liabilities presented. Leases are

also negotiated at market rates with independent, unrelated third

parties and are subject to periodic rental reviews.

Derivatives (Level 2)

Fair value is estimated by discounting the difference between the

contractual forward price and the current forward price for the

residual maturity of the contract using a risk free interest rate

(based on government bonds).

Non-derivative non-current financial liabilities (Level 2)

Fair value is calculated based on the present value of future

principal and interest cash flows, discounted at the market

rate of interest at the reporting date.

The following table shows amounts recognised in profit or loss in

relation to financial assets and liabilities within the scope of IFRS 9:

	2023	2022
	$m	$m
Recognised in profit or loss
Revenue – fair value of cash flow
hedges transferred from equity
to the income statement	0.4	1.7
Interest income on bank deposits
held at amortised cost	0.5	0.2
Fair value movement on derivatives	1.5	9.1
Financial income	2.0	9.3
Interest on bank loans	(23.4)	(19.6)
Fair value of cash flow hedges
transferred from equity to the income statement	5.9	0.1
Fair value movement on derivatives	(1.1)	–
Interest on lease liabilities	(1.3)	(1.4)
Financial costs	(19.9)	(20.9)

The following table shows amounts recognised directly in equity in

relation to financial assets and liabilities within the scope of IFRS 9:

	2023	2022
	$m	$m
Recognised directly in equity
Effective portion of changes in fair value of cash flow hedge (gain/(loss))	12.7	(2.6)
Fair value of cash flow hedges
transferred to income statement	(6.3)	1.6
Fair value of cash flow hedges
transferred to net assets	0.5	0.8
Effective portion of change in fair value of net investment hedge	14.8	46.2
Foreign currency translation
differences for foreign operations	(5.1)	(100.9)
Recycle deferred foreign exchange
losses on disposal of subsidiary	9.3
Recognised in:
Hedging reserve	6.9	(0.2)
Translation reserve	19.0	(54.7)

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22. Derivative financial instruments and hedging activities

		Contract or underlying
		principal amount	Fair Value
			Assets	Liabilities
At 31 December 2023:	Assets	Liabilities	$m	$m
Current:
Interest rate swaps – cash flow hedges	$100m	–	2.0	–
Interest rate swaps	$50m	–	0.6	–
Nickel swaps – cash flow hedges	324MT	–	4.4	–
Aluminium swaps – cash flow hedges	2,460MT	–	0.4	–
Total			7. 4	–
Non current:
Interest rate swaps – cash flow hedges	–	€142m	–	(2.1)
Nickel swaps – cash flow hedges	576MT	–	6.0	–
Total			13.4	(2.1)

		Contract or underlying
		principal amount					Fair Value
							Assets	Liabilities
At 31 December 2022:		Liabilities	Assets				$m	$m
Current:
Interest rate swaps – cash flow hedges		–	€120m/$50m				3.7	–
Nickel swaps – cash flow hedges		MT		–		288	–	(2.6)
Aluminium swaps – cash flow hedges	2,58	,380MT	1	0MT			0.1	(0.2)
Cross currency swaps		–		€100m/$110m			3.1	–
Foreign exchange forwards		–		€100m/$109m			–	(0.5)
Swaptions		–		$150m			3.8	–
Total							10.7	(3.3)
Non current:
Nickel swaps – cash flow hedges		0MT		216	MT	72	1.3	(2.8)
Total							1.3	(2.8)

Hedging activities

The Group is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative instruments

are foreign currency risk, commodity price risk and interest rate risk.

The Group’s risk management strategy is explained in Note 23.

Derivatives designated as hedging instruments

Commodity price risk

The Group enters into commodity swap contracts to reduce the volatility attributable to price fluctuations of aluminium and nickel.

To the extent they continue to meet the criteria for hedge accounting, the commodity forward contracts are accounted for as cash flow

hedges. The weighted average strike price on outstanding aluminium hedges was $2,266.6 (2022: $2,616.0) and the weighted average

strike price on outstanding nickel hedges was $30,931.4 (2022: $29,453.4).

There is an economic relationship between the hedged items and the hedging instruments as the terms of the commodity swap contracts

match the terms of the expected highly probable forecast transactions (i.e. notional amount and expected payment date). During the year

ended 31 December 2023, the group recognised a gain of $0.6m (2022: $0.5m) within revenue in the consolidated income statement

as a result of a discontinuation of nickel hedges. For all other commodity hedges, as all critical terms matched during the year, hedge

ineffectiveness was immaterial. The hedge ratio is 1:1.

Notes to the consolidated financial statements

continued

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22. Derivative financial instruments and hedging activities continued

Interest rate risk

The Group enters into interest rate swaps to swap a portion of the interest arising from the Group’s bank borrowings from floating to fixed.

Interest payments are highly probable, the hedged risk is the change in the market interest rate. The hedged items are the interest rate

cash flows on $100.0m of USD denominated debt and €142.0m of EUR denominated debt. The Group’s total borrowings are shown in

Note 19 to the financial statements.

The principal terms (notional, reset date, tenor) of the hedged items and the hedged instruments have been matched along with

the contractual interest cash flows, therefore creating an exact offset for these transaction resulting in a net fixed interest payable.

The interest rate swaps and the hedged items are matched (equal and opposite terms of interest rate, date and maturity) this results

in a designated hedge ratio of 1:1 or 100%.

Hedge ineffectiveness can arise from:

Changes in timing of the hedged item

A reduction in the amount of the hedged item considered to be highly probable

A change in the credit risk of Elementis or the counterparty to the derivative contract

Foreign currency basis spreads

The effect of cash flow hedges in the consolidated income statement and the consolidated statement of other comprehensive income

(“OCI”) is as follows:

			Amount
	Total hedging	Amount	reclassified	Line item
	(loss)/gain	reclassified	from OCI to	in the profit or loss
	recognised	from OCI to	the Balance	statement or
	in OCI	profit or loss	Sheet	Balance Sheet
	$m	$m	$m	$m
Year ended 31 December 2023
Interest rate swaps – cash flow hedges	2.2	5.9	–	Finance costs
Nickel forward contracts – cash flow hedges	(15.0)	0.4	–	Revenue
Aluminium forward contracts – cash flow hedges	0.1	–	(0.5)	Inventory
Year ended 31 December 2022
Interest rate swaps – cash flow hedges	3.6	(0.1)	–	Finance costs
Nickel forward contracts – cash flow hedges	(5.4)	1.7	–	Revenue
Aluminium forward contracts – cash flow hedges	(0.8)	–	0.8	Inventory

Amounts reclassified from other comprehensive income to profit or loss are due to the hedged item affecting profit or loss in the period.

There were no instances of non-occurrence of hedged cashflows in either the current or comparative period.

Hedge of net investments in foreign operations

The Group seeks to denominate the currency of its borrowings in euros and US dollars in order to match the currency of its cash flows,

earnings and assets which are principally denominated in those currencies.

The euro and US dollar borrowings in Elementis Holdings Limited are designated as net investment hedges, as the company’s functional

currency is pounds sterling. The Group does not undertake derivative transactions to hedge the foreign currency translation exposures.

The Group analyses the euro and US dollar net assets by subsidiary, and the foreign currency borrowings in the name of Elementis

Holdings Limited are allocated against certain tranches of net assets. The critical terms of the euro and US dollar borrowings and their

corresponding hedged items are therefore the same.

The Group performs a qualitative assessment of effectiveness and it is expected that the value of the euro and US dollar borrowings in

pounds sterling and the value of the corresponding hedged items in pounds sterling will systematically move in the opposite direction

in response to movements in the underlying exchange rates.

The main source of ineffectiveness in these hedging relationships is the impact of a decline in the carrying value of the hedged

item compared to the euro and US dollar borrowings, with the result that the value of the hedged item is less than the value of

hedging instrument.

Foreign currency revaluation on the euro and US dollar borrowings in the name of Elementis Holdings Limited are recorded in other

comprehensive income and deferred in the foreign currency translation reserve on the balance sheet as long as the hedge is effective.

Any ineffectiveness is recognised in the income statement for that year.

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22. Derivative financial instruments and

hedging activities continued

The impact of the hedged items on the statement of

comprehensive income is as follows:

	2023	2022
	Foreign	Foreign
	currency	currency
	translation	translation
	reserve	reserve
Year ended 31 December	$m	$m
Net investment in foreign subsidiaries	(5.1)	(100.9)

Impact of hedging on equity

Set out below is the reconciliation of each component of equity

and the analysis of other comprehensive income:

		Foreign
	Cash flow	currency
	hedge	translation
	reserve	reserve
	$m	$m
At 1 January 2022	(8.6)	(67.7 )
Effective portion of changes
in fair value arising from:
Derivative cash flow
hedging instruments	(2.6)	–
Amount reclassified to profit or loss	1.6	–
Amount reclassified to net assets	0.8	–
Transfer	7.8	–
Foreign currency revaluation of the net foreign operations	–	(100.9)
Foreign currency revaluation
of borrowings	–	46.2
At 31 December 2022	(1.0)	(122.4)
Effective portion of changes
in fair value arising from:
Derivative cash flow
hedging instruments	12.7	–
Amount reclassified to profit or loss	(6.3)	–
Amount reclassified to net assets	0.5	–
Recycling of deferred foreign exchange
losses on disposal of subsidiary	–	9.3
Foreign currency revaluation of the net foreign operations	–	(5.1)
Foreign currency revaluation
of borrowings	–	14.8
At 31 December 2023	5.9	(103.4)

23. Financial risk management

Risk management objectives

The Group has exposure to the following risks from its use of

financial instruments:

Credit risk

Liquidity risk

Market risk

The Board of Directors has overall responsibility for the

establishment and oversight of the Group’s risk management

framework. The Group’s risk management policies are established

to identify and analyse the risks faced by the Group, to set

appropriate risk limits and controls and to monitor risks and

adherence to limits. Risk management policies and systems are

reviewed regularly to reflect changes in market conditions and

the Group’s activities.

The Group’s Audit Committee oversees how management

monitors compliance with the Group’s risk management policies

and procedures and reviews the adequacy of the risk management

framework in relation to the risks faced by the Group. The Group’s

Audit Committee is assisted in its oversight role by Internal Audit.

Internal Audit undertakes both regular and ad hoc reviews of risk

management controls and procedures, the results of which are

reported to the Audit Committee.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or

counterparty to a financial instrument fails to meet its contractual

obligations, and arises principally from the Group’s receivables

from customers.

Trade and other receivables

The Group’s exposure to credit risk is influenced mainly by the

individual characteristics of each customer. The demographics

of the Group’s customer base, including the default risk of the

industry and country in which customers operate, has less

influence on credit risk. No single customer accounts for

a significant proportion of the Group’s revenue.

Each new customer is analysed individually for creditworthiness

before the Group’s standard payment and delivery terms and

conditions are offered. The Group’s review includes external

ratings, where available, and in some cases bank references.

Purchase limits are established for each customer, which

represents the maximum open amount without requiring approval

from the Board of Directors. Customers that fail to meet the

Group’s benchmark creditworthiness may transact with the

Group only on a prepayment basis.

The Group applies the IFRS 9 simplified approach in establishing

an allowance for expected credit losses (“ECLs”). The Group

therefore does not track changes in credit risk but instead

recognises a loss allowance based on lifetime ECLs at each

reporting date. A provision matrix is used to calculate lifetime

ECLs which takes into account the Group’s historical credit loss

experience adjusted for historical conditions that are not relevant

to future cashflows and forward looking factors specific to the

debtor and economic environment.

Investments

The Group limits its exposure to credit risk through a treasury

policy that imposes graduated limits on the amount of funds

that can be deposited with counterparties by reference to the

counterparties’ credit ratings, as defined by Standard & Poor’s

or Moody’s. Management does not expect any counterparty to

fail to meet its obligations.

Notes to the consolidated financial statements

continued

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23. Financial risk management continued

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting

date was:

	Carrying amount
	2023	2022
	$m	$m
Trade receivables	80.1	77.5
Cash and cash equivalents	65.8	54.9
At 31 December	145.9	132.4

The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:

	Carrying amount
	2023	2022
	$m	$m
North America	26.0	25.5
Europe	32.4	27. 2
Rest of the World	21.7	24.8
At 31 December	80.1	7 7. 5

Expected credit losses

Set out below is the information about the credit risk exposure on the Group’s trade receivables using a provision matrix:

			Expected			Expected
	Gross	Expected	credit loss	Gross	Expected	credit loss
	2023	credit loss	2023	2022	credit loss	2022
	$m	rate	$m	$m	rate	$m
Not past due	71.0	0.1%	–	67.9	0.1%	(0.1)
Past due 0-30 days	7.5	0.0%	–	6.3	0.0%	–
Past due 31-120 days	1.8	13.2%	(0.3)	3.2	0.0%	–
Past due > 121 days	0.7	97.1%	(0.6)	1.6	87. 5%	(1.4)
Total	81.0		(0.9)	79.0		(1.5)

The movement in the allowance for expected credit losses during the year was as follows:

	2023	2022
	$m	$m
At 1 January	1.5	1.7
Released to income statement – administrative expenses	(0.6)	0.5
Amounts written off	–	(0.5)
Transferred to assets held for sale (see Note 32)	–	(0.2)
At 31 December	0.9	1.5

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23. Financial risk management continued

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing

liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and

stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group’s funding policy is

to have committed borrowings in place to cover at least 125% of the maximum forecast net borrowings for the next 12 month period.

The committed facilities at 31 December were as follows:

	Total	Undrawn	Drawn	Total	Undrawn	Drawn
	committed	committed	committed	committed	committed	committed
	facilities	facilities	Facilities	facilities	facilities	Facilities
	2023	2023	2023	2022	2022	2022
	$m	$m	$m	$m	$m	$m
US dollar term loan	100.0	–	100.0	150.0	–	150.0
Euro term loan	157. 8	–	157.8	152.5	–	152.5
RCF	375.0	365.0	10.0	408.5	291.9	116.6
Lines of credit	22.9	22.9	–	22.4	22.4	–
Total	657.7	387.9	267.8	733.4	314.3	419.1
of which expires after more than 1 year		303.4			301.9

In addition, some suppliers have access to utilise the Group’s supplier finance programmes, which are provided by Santander and

US Bank. There is no cost to the Group for providing these programmes as the cost is borne by the suppliers. These programmes

allow suppliers to choose whether they want to accelerate the payment of their invoices, by the financing banks, at a low interest cost.

The amounts outstanding to the banks are presented within trade and other payables, and the cashflows are presented with cash

flows from operating activities. At the end of the period, the total facility with Santander was $17.8m (2022 $15.9m) with the net

balance outstanding of $nil (2022: $nil) and the total facility with US Bank was $3.5m (2022: $1.5m) with the net balance outstanding

of $0.8m (2022: $0.5m).

Exposure to liquidity risk

The maturity analyses for financial liabilities showing the anticipated remaining contractual undiscounted cash flows, including future

interest payments, at current year exchange rates and assuming floating interest rates remain at the latest fixing rates are:

				31 December 2023
	Within
	1 year	1 to 2 years	2 to 5 years	After 5 years	Total
	$m	$m	$m	$m	$m
Non-derivative financial liabilities:
Bank overdrafts	–	–	–	–	–
Secured bank loan	27.6	16.2	265.8	–	309.6
Trade and other payables	117.9	–	–	–	117.9
Lease liabilities	5.9	5.5	12.0	19.6	43.0
Total	151.4	21.7	277.8	19.6	470.5
Derivative financial liabilities:
Interest rate swaps	(3.6)	(0.1)	–	–	(3.7)
Commodity swap contracts	(4.9)	(4.5)	(3.1)	–	(12.5)
Total	(8.5)	(4.6)	(3.1)	–	(16.2)

Notes to the consolidated financial statements

continued

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23. Financial risk management continued

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Group’s income or

the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures

within acceptable parameters, whilst optimising the return on risk.

The Group uses derivatives in the ordinary course of business, and also incurs financial liabilities, in order to manage market risks.

All such transactions are carried out within the guidelines set by the Board.

Market risk – Currency risk

The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a foreign currency other than the

respective functional currencies of Group entities, primarily the US dollar and the euro. The Group hedges up to 100% of current and

forecast trade receivables and trade payables denominated in a foreign currency. The Group uses forward exchange contracts to hedge

its currency risk, with a maturity of less than one year from the reporting date.

Interest on borrowings is denominated in currencies that match the cash flows generated by the underlying operations of the Group,

primarily US dollar, but also euro and pounds sterling. This provides an economic hedge in instances where hedging derivatives are not

entered into. In respect of other monetary assets and liabilities denominated in foreign currencies, the Group ensures that its net exposure

is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short term imbalances.

The Group’s net investment in overseas subsidiaries creates exposure to foreign exchange fluctuations. The risk is hedged by US dollar

and euro denominated drawdowns under the syndicated facility designated as the hedged item in net investment hedge relationships.

This mitigates the currency risk arising from the retranslation of a subsidiary’s net assets into pounds sterling, the functional currency of

the ultimate parent Elementis plc.

Currency risk sensitivity analysis

The following table illustrates the effect on the income statement and items that are recognised directly in equity that would result from

a 10% strengthening of US dollar against the following currencies, before the effect of tax. The analysis covers only financial assets and

liabilities held at the balance sheet date and assumes that all other variables, in particular interest rates, remain constant.

	2023		2022
	Income		Income
	statement	Equity	statement	Equity
	$m	$m	$m	$m
Gain from US Dollar strengthening 10% against Euro	0.4	0.9	0.4	–
Gain/(loss) from US Dollar strengthening 10% against Sterling	0.2	(12.0)	0.8	(20.3)

Market risk – Interest rate

The Group’s policy is to borrow at both fixed and floating interest rates and to use interest rate swaps to generate the required interest

profile. These interest swaps are designated within cashflow hedging relationships with the interest payments on the borrowings they

are hedging. The risk being hedged is the exposure of the Group to market rate volatility on a portion of the core Group debt. The Group

policy does not require that a specific proportion of the Group’s borrowings are at fixed rates of interest.

Interest rate sensitivity analysis

A change of 100 basis points (1%) in interest rates would have impacted profit or loss by the amounts shown below. This analysis

assumes that all other variables, in particular foreign currency rates, remain constant.

	2023		2022
	100bps	100bps	100bps	100bps
	increase	decrease	increase	decrease
	$m	$m	$m	$m
Variable rate instruments – gain/(loss)	0.7	(0.7)	2.8	(2.0)

Market risk – Commodity price risk

The group is exposed to movements in the prices of commodities it purchases and sells such as aluminium and nickel. The volatility in the

prices of these commodities has led to the decision to enter into commodity swap contracts. The swap contracts do not result in physical

delivery, but are designated as cash flow hedges to offset the effect of price changes.

Commodity price sensitivity analysis

In 2023 and 2022 the Group’s aluminium purchases were fully hedged and all aluminium swap derivatives achieved hedge accounting;

there was no impact on profit or loss and no sensitivity is presented.

Other market price risk

Equity price risk arises from equity securities held within the Group’s defined benefit pension obligations. In respect of the US schemes,

management monitors the mix of debt and equity securities in its investment portfolio based on market expectations. The primary goal

of the Group’s investment strategy is to maximise investment returns, without excessive risk taking, in order to meet partially the Group’s

unfunded benefit obligations; management is assisted by external advisers in this regard. In respect of the UK scheme, the investment

strategy is set by the trustees and the Board is kept informed.

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23. Financial risk management continued

Capital management

The Board’s policy is to maintain a strong capital base so as to

maintain investor, creditor and market confidence, sustain future

development of the business and maximise shareholder value.

The capital structure of the Group consists of debt (see Note 19),

cash and cash equivalents (see Note 20) and equity attributable

to equity holders of the parent comprising capital, reserves

and retained earnings (see Statement of Changes in Equity).

The Group utilises a mix of debt funding sources including term

loans and revolving credit facilities (RCF) from the Group’s

syndicated borrowing facility with differing maturities to ensure

continuity and provide flexibility. The group is subject to two

financial covenants which apply to the Group’s syndicated

borrowing facilities. Following the refinancing on 1 July 2022

the Group is required to maintain a ratio of net debt/EBITDA

(post IFRS 16) of less than 3.50x and a minimum net interest cover

of 3.1x (in relation to earnings before net interest expense and tax).

The post IFRS 16 net debt/EBITDA ratio stood at 1.6x times at

31 December 2023 (2022: 2.3x) and the directors anticipate

the strong cash generation of the Group will continue to drive

a deleveraging profile going forwards. Net interest cover at

31 December 2023 was 6.2x (2022: 6.6x).

The Board monitors the adjusted return on operating capital

employed (“ROCE”) both including and excluding goodwill,

as defined on page 190.

The dividend policy is set out in the Chairman’s statement on

page 4.

24. Leases

Group as lessee

The Group has lease contracts for various items of property, plant,

machinery, vehicles and other equipment used in its operations.

Disclosures in relation to Right of Use Assets are included within

Note 11 – Property, plant and equipment.

The Group also has certain leases with lease terms of 12 months

or less and leases of low-value assets to which the Group

applies the ‘short-term lease’ and ‘lease of low-value assets’

recognition exemptions.

The weighted average incremental borrowing rate applied to lease

liabilities is 3.0% (2022: 3.6%).

The following are the amounts recognised in profit or loss:

	2023	2022
	$m	$m
Depreciation expense on right-of-use assets	5.3	5.5
Interest expense on lease liabilities	1.3	1.4
Expense related to short-term
leases and low-value assets	0.3	0.4
Expense relating to variable
lease payments not included
in lease liabilities	0.5	1.2

Set out below are the carrying amounts of lease liabilities and the

movements during the period:

	2023	2022
	$m	$m
At 1 January	36.3	40.2
Additions	5.1	5.5
Disposals	(0.6)	(2.2)
Interest expense	1.3	1.4
Payments	(6.5)	(7.1)
Foreign exchange movements	0.6	(1.1)
Transferred to liabilities held for sale
(see Note 32)	–	(0.4)
At 31 December	36.2	36.3

The maturity analysis of lease liabilities is as follows:

	2023	2022
	$m	$m
Within one year	5.9	6.1
In the second to fifth years inclusive	17.5	15.2
After five years	12.8	15.0
At 31 December	36.2	36.3

At 31 December 2023 there were $2.4m of leases that had not yet

commenced to which the Group had committed to.

25. Retirement benefit obligations

The Group has a number of contributory and non-contributory

post retirement benefit plans providing retirement benefits for the

majority of employees and Executive Directors. At 31 December

2023 the main schemes in the UK and US were of the defined

benefit type, the benefit being based on number of years of

service and either the employee’s final remuneration or the

employee’s average remuneration during a period of years

before retirement. The assets of these schemes are held in

separate trustee administered funds or are unfunded but

provided for on the Group balance sheet.

The UK defined benefit scheme had a surplus under IAS 19

of $38.7m (2022: $26.4m). In addition, the US defined benefit

scheme also had a surplus under IAS 19 of $3.4m (2022: $nil).

In accordance with the requirements of IFRIC 14 management

have concluded that the unconditional right to a refund of any

surplus under any winding up of the plan provides sufficient

evidence that an asset ceiling does not exist and as such the

full surplus has been recognised.

In addition the Group operates an unfunded post retirement

medical benefit (“PRMB”) scheme in the US. The entitlement

to these benefits is usually based on the employee remaining

in service until retirement age and completion of a minimum

service period.

Other employee benefit schemes included in the table overleaf

relate to two unfunded pension schemes, a long term service

award scheme in Germany and a special benefits programme

for a small number of former employees of the Eaglescliffe plant.

The Group also acquired two further unfunded pension schemes

and two long term service award schemes all in Germany as part

of the SummitReheis acquisition in 2017. These are included

within this category.

The Group also operates a small number of defined contribution

schemes and the contributions payable during the year are

recognised as incurred. The pension charge for the defined

contribution pension schemes for the year is $6.7m (2022: $6.0m).

Notes to the consolidated financial statements

continued

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25. Retirement benefit obligations continued

Net defined benefit liability

The net liability was as follows:

	UK pension	US pension	US PRMB
	scheme	schemes	scheme	Other	Total
	$m	$m	$m	$m	$m
2023
Total market value of assets	483.6	93.8	–	–	577. 4
Present value of scheme liabilities	(444.9)	(90.4)	(3.4)	(5.6)	(544.3)
Net asset/(liability) recognised in the balance sheet	38.7	3.4	(3.4)	(5.6)	33.1

	UK pension	US pension	US PRMB
	scheme	schemes	scheme	Other	Total
	$m	$m	$m	$m	$m
2022
Total market value of assets	462.8	91.6	–	–	554.4
Present value of scheme liabilities	(436.4)	(91.6)	(3.5)	(5.4)	(536.9)
Net asset/(liability) recognised in the balance sheet	26.4	–	(3.5)	(5.4)	17. 5

Employer contributions in 2023 were $1.8m (2022: $0.5m) to the UK scheme and $1.4m (2022: $1.2m) to US schemes. Top up

contributions to the UK scheme in 2024 will be $0.7m based on the 2021 triennial valuation.

Movement in net defined benefit asset/(liability)

The following table shows a reconciliation from the opening balances to the closing balances for the net defined benefit liability and

its components.

	UK pension	US pension	US PRMB
	scheme	schemes	scheme	Other	Total
	$m	$m	$m	$m	$m
Surplus/(deficit) in schemes at 1 January 2023	26.4	–	(3.5)	(5.4)	17.5
Included in profit or loss:
Current service cost	(0.1)	(0.3)	–	(0.1)	(0.5)
Running costs	(1.9)	(0.4)	–	–	(2.3)
Net interest income/(expense)	1.4	–	(0.2)	(0.1)	1.1
Total	(0.6)	(0.7)	(0.2)	(0.2)	(1.7)
Included in other comprehensive income:
Re-measurements:
Return on plan assets excluding interest income	9.7	4.3	–	–	14.0
Actuarial gains arising from demographic assumptions	12.2	–	–	0.1	12.3
Actuarial losses arising from financial assumptions	(9.5)	(1.9)	(0.2)	(0.1)	(11.7)
Actuarial (losses)/gains arising from experience adjustment	(3.0)	0.8	–	–	(2.2)
Exchange differences	1.7	–	–	(0.4)	1.3
Total	11.1	3.2	(0.2)	(0.4)	13.7
Contributions:
Employers	1.8	0.9	0.5	0.4	3.6
Surplus/(deficit) at 31 December 2023	38.7	3.4	(3.4)	(5.6)	33.1

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25. Retirement benefit obligations continued

	UK pension	US pension	US PRMB
	scheme	schemes	scheme	Other	Total
	$m	$m	$m	$m	$m
Surplus/(deficit) in schemes at 1 January 2022	56.6	(1.7)	(6.6)	(9.0)	39.3
Included in profit or loss
Current service cost	(0.5)	(0.6)	(0.1)	–	(1.2)
Running costs	(1.0)	(0.4)	–	–	(1.4)
Net interest income/(expense)	1.0	–	(0.3)	(0.1)	0.6
Total	(0.5)	(1.0)	(0.4)	(0.1)	(2.0)
Included in other comprehensive income
Re-measurements:
Return on plan assets excluding interest income	(200.4)	(26.1)	–	0.1	(226.4)
Actuarial gains arising from demographic assumptions	–	0.1	–	–	0.1
Actuarial losses arising from financial assumptions	191.3	26.1	1.2	2.8	221.4
Actuarial (losses)/gains arising from experience adjustment	(14.5)	1.3	–	(0.1)	(13.3)
Exchange differences	(6.6)	–	–	0.6	(6.0)
Total	(30.2)	1.4	1.2	3.4	(24.2)
Contributions:
Employers	0.5	0.6	0.6	0.3	2.0
Transferred to liabilities held for sale (see Note 32)	–	0.7	1.7	–	2.4
Surplus/(deficit) at 31 December 2022	26.4	–	(3.5)	(5.4)	17.5

Plan assets

Plan assets for the major schemes comprise:

	UK pension	US pension	US PRMB
	scheme	schemes	scheme	Total
	$m	$m	$m	$m
Equities	100.8	22.4	–	123.2
Bonds	339.4	58.6	–	398.0
Cash/liquidity funds	43.4	12.8	–	56.2
At 31 December 2023	483.6	93.8	–	577.4
Equities	80.2	26.4	–	106.6
Bonds	316.3	53.2	–	369.5
Cash/liquidity funds	66.3	12.0	–	78.3
At 31 December 2022	462.8	91.6	–	554.4

1 Including LDI repurchase agreement liabilities.

To reduce volatility risk a liability driven investment (LDI) strategy forms part of the Trustees’ management of the UK defined benefit

scheme’s assets, including government bonds, corporate bonds and derivatives. The bond assets category in the table above includes

gross assets of $587.0m (2022: $566.8m) and associated repurchase agreement liabilities of $247.6m (2022: $250.5m). Repurchase

agreements are entered into with counterparties to better offset the scheme’s exposure to interest and inflation rates, whilst remaining

invested in assets of a similar risk profile. Interest rate and inflation rate derivatives are also employed to complement the use of fixed

and indexed linked bonds in matching the profile of the scheme’s liabilities.

All equities, bonds and liquidity funds have quoted prices in active markets. Other assets include insured annuities, an insurance fund

and various swap products.

Within the UK pension scheme, the current asset allocation is approximately 44% in a liability matching fund consisting of gilts

(fixed interest and index linked), bonds, cash and swaps, 26% in a buy and maintain fund and 30% in an investment fund that includes

various equity and equity like funds. The aim of the trustees is to manage the risk relative to the liabilities associated with the scheme’s

investments through a combination of diversification, inflation protection and hedging of risk (currency, interest rate and inflation risk).

The US scheme currently has approximately 24% of its asset value invested in a range of equity funds designed to target higher returns

and thus reduce the pension deficit, with the balance invested in fixed income bonds and cash. The strategy is that as the deficit reduces,

a greater proportion of investments will be made into liability matching funds.

Notes to the consolidated financial statements

continued

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25. Retirement benefit obligations continued

Fair value of plan assets

Changes in the fair value of plan assets for the major schemes are as follows:

	UK pension	US pension	US PRMB
	scheme	schemes	scheme	Total
	$m	$m	$m	$m
At 1 January 2022	774.9	130.1	–	905.0
Expected return	12.6	3.3	–	15.9
Running costs	(1.0)	(0.4)	–	(1.4)
Actuarial gains	(200.4)	(26.1)	–	(226.5)
Contributions by employer	0.5	0.6	–	1.1
Benefits paid	(34.7)	( 7.7 )	–	(42.4)
Exchange differences	(89.1)	–	–	(89.1)
Transferred to assets held for sale	–	(8.2)	–	(8.2)
At 31 December 2022	462.8	91.6	–	554.4
Expected return	23.3	4.4	–	27.7
Running costs	(1.9)	(0.4)	–	(2.3)
Actuarial gains	9.7	4.3	–	14.0
Contributions by employer	1.8	0.9	–	2.7
Benefits paid	(39.2)	(7.0)	–	(46.2)
Exchange differences	27.1	–	–	27.1
At 31 December 2023	483.6	93.8	–	577.4

Defined benefit obligation

Changes in the present value of the defined benefit obligation for the major schemes are as follows:

	UK pension	US pension	US PRMB
	scheme	schemes	scheme	Total
	$m	$m	$m	$m
At 1 January 2022	(718.3)	(131.8)	(6.6)	(856.7)
Service cost	(0.5)	(0.6)	(0.1)	(1.2)
Past service cost	–	–	–	–
Interest cost	(11.6)	(3.3)	(0.3)	(15.2)
Actuarial gains/(losses)
– demographic assumptions	–	0.1	–	0.1
– financial assumptions	191.3	26.1	1.2	218.6
– experience adjustments	(14.5)	1.3	–	(13.2)
Benefits paid	34.7	7.7	0.6	43.0
Exchange differences	82.5	–	–	82.5
Transferred to assets held for sale	–	8.9	1.7	10.6
At 31 December 2022	(436.4)	(91.6)	(3.5)	(531.5)
Service cost	(0.1)	(0.3)	–	(0.4)
Past service cost	–	–	–	–
Interest cost	(21.9)	(4.4)	(0.2)	(26.5)
Actuarial gains/(losses)
– demographic assumptions	12.2	–	–	12.2
– financial assumptions	(9.5)	(1.9)	(0.2)	(11.6)
– experience adjustments	(3.0)	0.8	–	(2.2)
Benefits paid	39.2	7.0	0.5	46.7
Exchange differences	(25.4)	–	–	(25.4)
At 31 December 2023	(444.9)	(90.4)	(3.4)	(538.7)

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25. Retirement benefit obligations continued

Actuarial assumptions

A full actuarial valuation was carried out as at 30 September 2020 for the UK scheme and as at 31 December 2015 for the US schemes.

The principal assumptions used by the actuaries for the major schemes have been updated by the actuaries at the balance sheet date

and were as follows:

	UK %	US %
2023
Rate of increase in salaries	4.2	3.0
Rate of increase in pensions in payment	3.1	N/A
Discount rate	4.5	5.1
Inflation	3.2	2.4
2022
Rate of increase in salaries	4.5	3.0
Rate of increase in pensions in payment	3.3	N/A
Discount rate	4.8	5.1
Inflation	3.5	2.4

The assumed life expectancies on retirement are:

		UK		US
	2023	2022	2023	2022
	years	years	years	years
Retiring at 31 December
Males	21	22	21	21
Females	24	24	22	22
Retiring in 20 years
Males	23	23	21	21
Females	25	26	23	23

The main assumptions for the PRMB scheme are a discount rate of 4.8% (2022: 5.1%) per annum and a health care cost trend of 6.9%

(2022: 6.7%) per annum for claims pre age 65, reducing to 4.1% per annum by 2033 (2022: 4.2%). Actuarial valuations of retirement

benefit plans in other jurisdictions have either not been updated for IAS 19 purposes or disclosed separately because of the costs

involved and the considerably smaller scheme sizes and numbers of employees involved.

At 31 December 2023, the weighted average duration of the defined benefit obligations for the major schemes was as follows:

UK: 10 years

US: 8 years.

Sensitivity analysis

The sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below:

Assumption	Change in assumption	Impact on UK scheme	Impact on US scheme
Discount rate	Increased/decreased by 0.5%	Decreased/increased by 5%	Decreased/increased by 4%
Rate of inflation	Increased/decreased by 0.5%	Increased/decreased by 3%	Increased/decreased by 0%
Rate of salary growth	Increased/decreased by 0.5%	Increased/decreased by 0%	Increased/decreased by 0%
Rate of mortality	Increased by 1 year	Increased by 5%	Increased by 3%

The sensitivity analyses above have been determined based on a method that extrapolates the impact on the defined benefit obligation as

a result of reasonable changes in key assumptions occurring at the end of the reporting period. These sensitivities have been calculated

to show the movement of the defined obligation following a change in a particular assumption in isolation, assuming no other changes in

market conditions.

Notes to the consolidated financial statements

continued

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26. Share based payments

The Group maintains a number of active share option and award

plans and schemes for its employees. These are as follows:

Savings-related options

Options are granted under the tax-advantaged Save As You

Earn (“SAYE”) share option scheme in the UK. The SAYE

allows UK-based eligible employees to acquire options over the

Company’s shares at a discount of up to 20% of their market value

at the date of grant. Options are normally exercisable during the

six month period following either the third or fifth anniversary of

the start of the relevant savings contract. Savings contracts are

subject to the statutory savings limit of £500 per month.

US-based employees can enter into a similar share save scheme.

Employees can enter into two year savings contracts saving up to

a maximum of $2,000 per month, allowing eligible employees to

acquire options over the Company’s shares at a discount of up to

15% of their market value at the date of grant.

Long-term incentive plan (“LTIP”) awards

The LTIP is a discretionary employee share scheme for Executive

Directors and senior managers. The vesting of the awards are

subject to performance conditions over a three year period at the

discretion of the Remuneration Committee. The performance

conditions of the LTIP are detailed in the Remuneration Report

on pages 115 and 116. As approved at the 2018 AGM, restricted

shares (i.e. shares that vest based on time only) are awarded to

participants below Board level. Shadow LTIPs are in place for

senior managers based in China and Malaysia.

Deferred share bonus plan (“DSBP”) awards

The DSBP operates exclusively for the Executive Directors.

Under this scheme, 50% of any cash bonus payable is awarded

in shares and deferred for two years. There are no other

performance conditions other than continued employment.

Legacy schemes

Prior to the introduction of the LTIP for senior managers, certain

employees participated in the Executive Share Option Scheme

(“ESOS”). The ESOS which, except for outstanding awards which

will run their course, has been discontinued. The Company

operated shadow ESOS for a number of senior managers,

who were employed or based in China or Malaysia.

Share-based payment awards were valued (as shown in the table

below) using the binomial option pricing model. The weighted fair

value per award granted and the weighted average assumptions

used in the calculations are as follows:

	2023	2022
Fair value per option (pence)	104.2	95.2
Expected volatility (%)	38.0	44.0
Risk free rate (%)	4.7	3.3
Expected dividend yield (%)	2.4	3.0

Expected volatility was determined by calculating the historical

volatility of the Company’s share price over the previous five years.

The expected life used in the model has been adjusted, based on

management’s best estimate, for the effects of non-transferability,

exercise restrictions and behavioural considerations.

The Group recognised total expenses of $4.4m for continuing

operations (2022: $3.1m) with $4.4m recognised for total

operations (2022: $3.4m) related to share based payment

transactions during the year.

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Notes to the consolidated financial statements

continued

26. Share based payments continued

At 31 December 2023 the following options/awards to subscribe for ordinary shares were outstanding:

		Exercisable						At 31
				At 1 January				December
	Exercise price			2023	Granted	Exercised	Expired	2023
Year of grant	(p)	From	To	’000	’000	’000	’000	’000
UK savings related share option scheme
2019	121.33	01/11/22	01/05/23	12	–	–	(12)	–
2020	58.00	01/11/23	01/05/24	789	–	(779)	(10)	–
2021	117.0 0	01/11/24	01/05/25	46	–	–	(27)	19
2022	88.00	01/11/25	01/05/26	166	–	–	(36)	130
2022	88.00	01/11/27	01/15/28	34	–	–	(34)	–
2023	91.00	01/11/26	01/05/27	–	315	–	–	315
2023	91.00	01/11/28	01/05/29	–	49	–	–	49
				1,047	364	(779)	(119)	513
US savings related share option scheme
2020	6 3.11	16/09/22	16/12/22	156	–	–	(49)	107
2021	133.71	15/09/23	15/12/23	83	–	–	(83)	–
2022	92.31	15/09/24	15/12/24	909	–	(20)	(295)	594
2023	94.86	15/09/25	15/12/26	–	211	–	–	211
				1,148	211	(20)	(427)	912
Executive share option schemes/awards granted under the LTIP
2015	290.20	01/04/18	01/04/25	16	–	–	(16)	–
2015	Nil	27/04/18	27/04/25	7	–	–	–	7
2016	218.17	04/04/19	04/04/26	21	–	–	–	21
2017	Nil	07/03/17	07/03/27	92	–	–	–	92
2017	Nil	07/03/19	07/03/27	7	–	–	–	7
2017	Nil	07/03/20	07/03/27	17	–	–	–	17
2017	264.66	03/04/20	03/04/27	31	–	–	–	31
2018	Nil	05/03/20	05/03/28	73	–	–	–	73
2019	Nil	06/03/21	06/03/29	49	–	–	–	49
2019	Nil	01/04/22	01/04/22	26	–	–	(26)	–
2020	Nil	05/03/23	05/03/30	76	–	–	–	76
2020	Nil	07/04/23	07/04/30	4,798	–	(523)	(4,268)	–
2020	Nil	07/04/22	07/04/22	106	–	(106)	–	–
2020	Nil	07/04/23	07/04/23	2,309	–	(2,197)	(57)	55
2020	Nil	03/08/23	03/08/23	121	–	(88)	–	33
2020	Nil	11/09/23	11/09/23	16	–	(16)	–	–
2020	Nil	30/12/23	30/12/23	127	–	(94)	(3)	30
2021	Nil	06/04/24	06/04/31	2,621	–	–	(73)	2,548
2021	Nil	06/04/24	06/04/31	1,461	–	–	(172)	1,289
2021	Nil	07/04/24	24/05/31	13	–	–	(13)	–
2021	Nil	06/04/24	16/08/31	20	–	–	–	20
2021	Nil	06/04/24	01/09/31	9	–	–	–	9
2021	Nil	06/04/24	13/09/31	23	–	–	(5)	18
2021	Nil	06/04/24	01/10/31	151	–	–	(18)	133
2021	Nil	06/04/24	13/12/31	84	–	–	(14)	70
2022	Nil	05/03/25	05/03/32	213	–	–	–	213
2022	Nil	05/03/25	05/03/32	490	–	–	–	490
2022	Nil	04/04/25	04/04/32	3,082	–	–	(170)	2,912
2022	Nil	04/04/25	04/04/25	1,286	–	–	(180)	1,10 6

4,7

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		Exercisable						At 31
				At 1 January				December
	Exercise price			2023	Granted	Exercised	Expired	2023
Year of grant	(p)	From	To	’000	’000	’000	’000	’000
2022	Nil	04/04/25	04/04/25	450	–	–	–	450
2022	Nil	04/04/25	04/04/25	133	–	–	(13)	120
2022	Nil	06/04/24	06/04/24	16	–	–	–	16
2022	Nil	04/04/25	04/04/25	12	–	–	–	12
2022	Nil	06/04/24	06/04/24	13	–	–	(13)	–
2022	Nil	04/04/25	04/04/25	13	–	–	(13)	–
2022	Nil	04/04/25	04/04/25	18	–	–	–	18
2023	Nil	08/03/26	08/03/33	–	374	–	–	374
2023	Nil	08/03/26	08/03/33	–	148	–	–	148
2023	Nil	04/04/26	04/04/33	–	3,234	–	(51)	3,183
2023	Nil	04/04/26	04/04/26	–	1,299	–	(51)	1,248
2023	Nil	21/06/25	21/06/25	–	20	–	–	20
2023	Nil	24/07/25	24/07/25	–	14	–	–	14
2023	Nil	03/04/25	03/04/25	–	320	–	–	320
				18,000	5,409	(3,024)	(5,156)	15,229

4,7

1 Where necessary option prices were adjusted for by a factor of 1.092715 to reflect the dilutive effects of the 2018 Rights Issue.

2 These options include cash settled shadow executive options granted to a number of executives on the same basis as the executive options (with the same

performance conditions and exercise provisions). These shadow options are included in the calculation of the total expenses recognised by the Group related

to share based payments. The closing balance of the 2011, 2012 and 2017 options shown above include no shadow options.

3 Awards made as one-off agreements that borrow from the terms of the LTIP.

4 These options include cash settled shadow LTIPs granted to a number of executives on the same basis as the LTIP (with the same performance conditions and

exercise provisions). These shadow LTIPs are included in the calculation of the total expenses recognised by the Group related to share based payments.

5 Conditional share award under the Deferred Share Bonus Plan.

6 Awards made as one-off agreements under the Deferred Share Bonus Plan (nil cost options).

7 The closing balance of 2020, 2021, 2022 and 2023 LTIPs shown above include approximately 124,933, 130,995, 282,174 and 113,154 shadow LTIPs respectively.

8 Conditional share award under the Deferred Share Bonus Plan (nil cost award, structured as restricted share units).

The weighted average remaining contractual life of the above shares outstanding at 31 December 2023 was 5.6 years

(2022: 5.2 years).

The weighted average exercise prices of options disclosed in the previous table were as follows:

	2023	2022
	Average	Average
	exercise	exercise
	price (p)	price (p)
At 1 January	9.6	11.9
Granted	8.9	14.9
Exercised	12.3	30.6
Expired	10.0	20.4
At 31 December	8.6	9.6
Exercisable at 31 December	31.8	49.3

The weighted average share price at the date of exercise of share options exercised during the year was 12.3 pence (2022: 31.5 pence).

The number of exercisable options outstanding as at 31 December 2023 was 676,151 (2022: 613,228).

26. Share based payments continued

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27. Related party transactions

The Company is a guarantor to the UK pension scheme under

which it guarantees all current and future obligations of UK

subsidiaries currently participating in the pension scheme to

make payments to the scheme, up to a specified maximum

amount. The maximum amount of the guarantee is that which

is needed (at the time the guarantee is called on) to bring the

scheme’s funding level up to 105% of its liabilities, calculated in

accordance with section 179 of the Pensions Act 2004. This is

also sometimes known as a Pension Protection Fund (“PPF”)

guarantee, as having such a guarantee in place reduces the

annual PPF levy on the scheme.

The Group consists of the parent company, Elementis plc,

being the ultimate parent company of the Group, incorporated

in the United Kingdom and its subsidiaries and associates. In

accordance with Section 409 of the Companies Act 2006 a full

list of related undertakings, the country of incorporation and the

effective percentage of equity owned as at 31 December 2023 is

disclosed in Note 6 to the parent company financial statements.

The remuneration of key management personnel of the Group,

which is defined as the Board of Directors, is shown below:

	2023	2022
	$m	$m
Salaries and short term
employee benefits	3.6	3.4
Post-employment benefits	0.3	0.3
Other long term benefits	0.4	0.4
Share based payments	1.3	0.4
Total	5.6	4.5

Full details of all elements of the remuneration of Directors is set

out in the Directors’ Remuneration report on pages 96 to 122.

28. Movement in net borrowings

	2023	2022
	$m	$m
Change in net cash resulting from cash flows:
Increase/(decrease) in cash and cash equivalents	9.9	(27.8)
Decrease/(increase) in borrowings repayable within one year	2.5	(3.0)
Decrease in borrowings repayable after one year	158.0	54.6
	170.4	23.8
Currency translation differences	(5.6)	10.4
Decrease in net borrowings	164.8	34.2
Net borrowings at 1 January	(366.8)	(401.0)
Net borrowings at 31 December	(202.0)	(366.8)

	Bank and		Total	Cash and	Net debt
	other	Lease	financing	cash	and lease
	borrowings	liabilities	liabilities	equivalents	liabilities
	$m	$m	$m	$m	$m
At 1 January 2022	(485.6)	(40.2)	(525.8)	84.6	(441.2)
Exchange rate adjustments	12.3	1.1	13.4	(2.0)	11.4
Cash flows from financing activities	51.6	7.1	58.7	(57.8)	0.9
Other movements	–	(4.7)	(4.7)	30.1	25.4
Transferred to liabilities held for sale	–	0.4	0.4	–	0.4
At 31 December 2022	(421.7)	(36.3)	(458.0)	54.9	(403.1)
Exchange rate adjustments	(6.6)	(0.7)	(7.3)	1.0	(6.3)
Cash flows from financing activities	160.5	6.5	167.0	9.9	176.9
Other movements	–	(5.0)	(5.0)	–	(5.0)
At 31 December 2023	(267.8)	(35.5)	(303.3)	65.8	(237.5)

Included in the net movement of borrowings of $160.5m (2022: $51.6m) are total draw downs of $122.3m (2022: $137.9m) and total

repayments of $282.8m (2022: 189.5m).

Notes to the consolidated financial statements

continued

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29. Dividends

No interim dividend was paid in 2023 (2022: nil cents per share).

The Group is proposing a final dividend for the year ended

31 December 2023 of 2. 1 cents per share (2022: nil cents

per share). The total dividend for the year is 2.1 cents per share

(2022: nil cents per share).

The amount payable for the final dividend, based on the

anticipated number of qualifying ordinary shares registered on

the record date is $12m.

The payment of this dividend will not have any tax consequences

for the Group.

30. Contingent liabilities

As is the case with other chemical companies, the Group

occasionally receives notice of litigation relating to regulatory

and legal matters. A provision is recognised when the Group

believes it has a present legal or constructive obligation as

a result of a past event, and it is probable that an outflow of

economic benefits will be required to settle the obligation.

Where it is deemed that an obligation is merely possible

and that the probability of a material outflow is not remote,

the Group would disclose a contingent liability.

The Group has not received any notice of litigation relating to

events arising prior to the balance sheet date that is expected

to lead to a material exposure.

In 2013 the UK Government (through HMRC) introduced the UK

Finance Company Exemption (“FCE”) regime. Elementis entered

into the FCE regime during 2014. In October 2017 the European

Commission opened a State Aid investigation into the regime.

In April 2019 the European Commission concluded that the FCE

regime constituted State Aid in circumstances where Groups

had accessed the regime using a financing company with UK

significant people functions; the European Commission therefore

instructed the UK Government to collect any relevant State Aid

amounts. The UK government and other UK based international

companies, including Elementis, appealed to the General Court

of the European Union against the decision in 2019.

In Spring 2020 HMRC requested that affected Groups submit

their UK significant people function analysis. The deadline for

submission of these analyses was delayed due to the impact

of COVID-19 and Elementis submitted its analysis to HMRC in

July 2020. In December 2020 the UK government introduced

legislation to commence collection proceedings.

Elementis received a charging notice from HMRC on 5 February

2021 which assessed for the maximum exposure of $19m

(excluding interest). This was paid to HMRC on 5 March 2021.

A charging notice for associated interest of $1m was received

on 24 June 2021 and paid on 7 July 2021. Whilst Elementis

lodged an appeal against the charging notices that did not

defer the payment of the tax assessed.

The UK Government’s appeal against the European Commission’s

decision was heard by the General Court of the European Union

during October 2021 and on 8 June 2022 the General Court of

the European Union ruled against the UK Government. The UK

Government lodged a further appeal to the European Court of

Justice during Q3 2022 and the case was heard during January

2024, with a decision expected during Q2 2024. As Elementis

continues to consider that the appeal process will ultimately be

successful, at 31 December 2023 an asset has been recorded

within non-current assets in the expectation that the charge will

be repaid in due course.

In August 2022 the Brazilian tax authorities opened a tax audit into

the Group’s Brazilian entity. The audit is focused on the customs

classification code used since 2017 for one of the entity’s imported

raw materials. The potential exposure is $7.6m. Management have

appealed the decision of the tax authorities and based on legal

advice obtained have concluded that as at 31 December 2023

it is not probable that an outflow of economic resources will be

required to settle the matter.

During 2022 the Group terminated a distribution agreement

with one of its distributors. The distributor has brought a claim

for compensation as a result of the termination. This matter

has now proceeded to arbitration and management have

concluded at this stage that the obligation cannot be measured

with sufficient reliability.

31. Events after the balance sheet date

On 6 March 2024, Elementis entered into an agreement to sell

its former Chromium manufacturing site at Eaglescliffe to Flacks

Group for negative purchase consideration of £11.5m ($14.5m).

Completion of the transaction is conditional on regulatory approval.

There were no other significant events after the balance sheet date.

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32. Business exits

2023 business exits

On 29 November 2022 the Group entered into a share purchase

agreement to sell the Chromium business to Yildirim Group for an

enterprise value of $170m. At 30 November 2022 the completion

of the sale within the next 12 months was deemed to be highly

probable and as such the Chromium business met the criteria to

be classified as a held for sale asset and a discontinued operation.

The sale completed on 31 January 2023, and Elementis received

gross cash proceeds of $139.2m ($127.2m net of total disposal

transaction costs).

The results of the discontinued operation, which have been

included in the consolidated income statement within ‘Profit

from discontinued operations’, were as follows:

	2023	2022
	$m	$m
Revenue	14.4	185.0
Expenses	(14.2)	(165.0)
Calculated gain on sale of Chromium business	26.6	–
Disposal transaction costs	(6.4)	(5.6)
Recycling of deferred foreign
exchange losses	(9.3)	–
Profit before income tax	11.1	14.4
Tax	(12.8)	(2.9)
(Loss)/profit from discontinued operations	(1.7)	11.5

Revenue includes $nil (2022: $nil) related to inter-segment sales.

A reconciliation of the reported operating profit/loss from

discontinued operations to adjusted operating profit/loss from

discontinued operations is provided below:

	2023	2022
	$m	$m
Operating profit	11.1	15.2
Adjusting items:
Calculated gain on sale of Chromium business	(26.6)	–
Disposal transaction costs	6.4	5.6
Recycling of deferred foreign
exchange losses on sale of business	9.3	–
Increase in environmental
provisions due to additional
remediation work identified	–	5.3
Decrease in environmental provisions
due to change in discount rate	–	(3.1)
Amortisation of intangibles arising
on acquisition	–	0.2
Adjusted operating profit	0.2	23.2

Details of assets and liabilities at the date of disposal are provided

in the following table:

	2023
	$m
Goodwill	–
Intangible assets	1.0
Property, plant and equipment	70.2
Inventories	69.1
Trade and other receivables	20.7
Total assets	161.0
Trade and other payables	(23.2)
Provisions	(19.7)
Pensions	(2.2)
Tax liabilities	(3.2)
Lease liabilities	(0.1)
Total liabilities	(48.4)
Net assets disposed	112.6
Gross cash proceeds	139.2
Calculated gain on sale of Chromium business	26.6

Notes to the consolidated financial statements

continued

182

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Annual Report and Accounts 2023

Company balance sheet

At 31 December 2023

Note

2023

£m

2022

£m

Non-current assets

Investments 6 786.0 782.7

Debtors 7 12.7 12.7

Total non-current assets 798.7 795.4

Debtors 7 – –

Creditors: amounts falling due within one year

Creditors 8 – (0.6)

Net current liabilities – (0.6)

Total assets less current liabilities 798.7 794.8

Creditors: Amounts falling due after more than one year

Amounts due to subsidiary undertakings (191.3) (190.9)

Net assets 607. 4 603.9

Capital and reserves

Called up share capital 9 29.4 29.2

Share premium account 177.7 17 7.3

Capital redemption reserve 9 83.3 83.3

Other reserves 250.5 250.5

Share option reserve 9 28.9 25.6

Profit and loss account 37.6 38.0

Equity shareholders’ funds 607. 4 603.9

The Company recognised a loss for the financial year ended 31 December 2023 of £0.4m (2022: £1.4m).

The financial statements of Elementis plc, registered number 3299608, on pages 183 to 189 were approved by the Board on

6 March 2024 and signed on its behalf by:

Paul Waterman Ralph Hewins

CEO CFO

Strategic Report Financial Statements Shareholder InformationCorporate Governance

183

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Annual Report and Accounts 2023

Company statement of changes in equity

for the year ended 31 December 2023

capital

£m

premium

£m

Capital

redemption

reserve

£m

Other

reserves

£m

options

reserve

£m

Retained

earnings

£m

Total

£m

Balance at 1 January 2022 29.1 176.6 83.3 250.5 20.7 41.7 601.9

Comprehensive income

Loss for the year – – – – – (1.4) (1.4)

Total other comprehensive loss – – – – – – –

Total comprehensive loss – – – – – (1.4) (1.4)

Transactions with owners

Issue of shares by the Company 0.1 0.7 – – – – 0.8

Share based payments – – – – 2.6 – 2.6

Dividends received – – – – – – –

Dividends paid – – – – – – –

Transfer – – – – 2.3 (2.3) –

Total transactions with owners 0.1 0.7 – – 4.9 (2.3) 3.4

Balance at 31 December 2022 29.2 177.3 83.3 250.5 25.6 38.0 603.9

Balance at 1 January 2023 29.2 177.3 83.3 250.5 25.6 38.0 603.9

Comprehensive income

Loss for the year – – – – – (0.4) (0.4)

Total other comprehensive loss – – – – – – –

Total comprehensive loss – – – – – (0.4) (0.4)

Transactions with owners

Issue of shares by the Company 0.2 0.4 – – – – 0.6

Share based payments – – – – 3.3 – 3.3

Dividends received – – – – – – –

Dividends paid – – – – – – –

Transfer – – – – – – –

Total transactions with owners 0.2 0.4 – – 3.3 (0.4) 3.5

Balance at 31 December 2023 29.4 177.7 83.3 250.5 28.9 37.6 607.4

The Company’s distributable reserves amount to £37.6m (2022: £38.0m) at the end of the period. The Company regularly reviews

its distributable reserves and makes dividend recapitalisations as and when necessary to ensure it can make all expected dividend

payments. The Company has sufficient subsidiary reserves to enable such recapitalisations in 2024 and beyond.

For more information on the dividend declared and the dividend per share please see Note 29 of the Group financial statements.

184

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Annual Report and Accounts 2023

Notes to the company financial statements of Elementis plc

for the year ended 31 December 2023

1. General information

Elementis plc is a public company limited by shares and is

incorporated and domiciled in England. The address of its

registered office is The Bindery, 5th Floor, 51-53 Hatton Garden,

London, EC1N 8HN. The principal activity of the Company is

to act as the ultimate holding company of the Elementis Group

of companies.

2. Basis of preparation

The Company’s financial statements have been prepared under

the historical cost convention, in compliance with applicable

United Kingdom accounting standards, including Financial

Reporting Standard 101 – ‘Reduced Disclosure Framework –

Disclosure exemptions from EU adopted IFRS for qualifying

entities’ (FRS 101), and with the Companies Act 2006. The

Company has presented its results under FRS 101.

As a qualifying entity whose results are consolidated in the

Elementis plc consolidated financial statements on pages 152 to

214, the Company has taken advantage of the exemption under

FRS 101 from preparing a statement of cash flows and associated

notes, the effects of new but not yet effective IFRSs, disclosures

in respect of transactions and the capital management of

wholly owned subsidiaries and key management personnel

compensation disclosures.

As the consolidated financial statements include equivalent

disclosures, the Company has also taken the disclosure

exemptions under FRS 101 in respect of certain requirements of

IAS 1, IAS 7 statement of cash flows, IAS 8 accounting policies,

IAS 24 related party disclosures, IAS 36 impairment of assets,

group settled share-based payments under IFRS 2 share based

payment, IFRS 3 business combinations, IFRS 5 non-current

assets held for sale and discontinued operations, disclosures

required by IFRS 7 financial instruments disclosures and by

IFRS 13 fair value measurement, IFRS 15 revenue from contracts

with customers and IFRS 16 leases.

By virtue of section 408 of the Companies Act 2006 the company

is exempt from presenting an income statement and disclosing

employee numbers and staff costs.

As a consequence of the majority of the Company’s assets,

liabilities and expenses originating in pounds sterling, the

Company has chosen pounds sterling as its reporting currency.

3. Summary of significant

accounting policies

The principal accounting policies applied in the preparation

of these financial statements are set out below. These policies

have been consistently applied to all the years presented,

unless otherwise stated. The Company has adopted FRS 101

in these financial statements.

Foreign currencies

Transactions in foreign currencies are recorded at the rates of

exchange ruling at the date of the transaction. Monetary assets

and liabilities denominated in foreign currencies are translated

using the contracted rate or the rate of exchange ruling at the

balance sheet date and the gains and losses on translation

are included in the profit and loss account.

Investments

Investments in subsidiaries are included in the balance sheet

at cost less accumulated impairment losses.

Potential indicators of impairment, including the market

capitalisation of the group dropping below the net assets of

Elementis plc, have been considered. The recoverable amounts

of cash generating units as determined for the impairment testing

of goodwill also support the recoverable amounts of the parent

Company’s investments.

Dividends on shares presented within shareholders’ funds

Dividends unpaid at the balance sheet date are only recognised

as a liability at that date to the extent that they are appropriately

authorised and are no longer at the discretion of the Company.

Pensions and other post-retirement benefits

The Company participates in the Elementis Group defined benefit

pension scheme. The assets of the scheme are held separately

from those of the Company. Details of the latest valuation carried

out in September 2020 can be found in the 2020 Elementis plc

Annual Report and Accounts. An updated triennial valuation

was performed in September 2023, however the results of this

valuation will not be finalised until 2024. Following the introduction

of the revised reporting standard, any surplus or deficit in the

Elementis Group defined benefit pension scheme is to be reported

in the financial statements of Elementis UK Limited, which employs

the majority of active members of the scheme and is responsible

for making deficit contributions under the current funding plan.

Taxation

Deferred tax is provided on temporary differences between the

carrying amounts of assets and liabilities for financial reporting

purposes and the amounts used for taxation purposes. There

were no significant judgements or estimates necessary in 2023.

Changes in accounting policies

The accounting policies adopted are consistent with those of the

previous financial year.

Share based payments

The fair value of share options granted to employees is recognised

as an expense with a corresponding increase in equity. Where the

Company grants options over its own shares to the employees of

its subsidiaries it recognises in its individual financial statements an

increase in the cost of investment in its subsidiaries equivalent to

the equity settled share based payment charge recognised in its

subsidiaries’ financial statements, with the corresponding credit

being recognised directly in equity. The fair value is measured

at the grant date and spread over the period during which the

employees become unconditionally entitled to the options. The fair

value of the options granted is measured using a binomial model,

taking into account the terms and conditions upon which the

options were granted. The amount recognised as an expense is

adjusted to reflect the actual number of share options that vest

except where forfeiture is only due to share prices not achieving

the threshold for vesting.

Strategic Report Financial Statements Shareholder InformationCorporate Governance

185

Elementis plc

Annual Report and Accounts 2023

Notes to the company financial statements of Elementis plc

continued

3. Summary of significant accounting

policies continued

Classification of financial instruments issued by

the company

Financial instruments issued by the Company are treated as equity

only to the extent that they meet the following two conditions:

a. They include no contractual obligations upon the Company

to deliver cash or other financial assets or to exchange financial

assets or financial liabilities with another party under conditions

that are potentially unfavourable to the Company.

b. Where the instrument will or may be settled in the Company’s

own equity instruments, it is either a non-derivative that includes

no obligation to deliver a variable number of the Company’s own

equity instruments or is a derivative that will be settled by the

Company’s exchanging a fixed amount of cash or other financial

assets for a fixed number of its own equity instruments.

To the extent that the definition is not met, the proceeds of issue

are classified as a financial liability. Where the instrument so

classified takes the legal form of the Company’s own shares,

the amounts presented in these financial statements for called

up share capital and share premium account exclude amounts

in relation to those shares.

Finance payments associated with financial liabilities are dealt

with as part of interest payable and similar charges. Finance

payments associated with financial instruments that are classified

as part of shareholders’ funds are dealt with as appropriations

in the reconciliation of movements in shareholders’ funds.

4. Profit for the financial year attributable

to shareholders

As permitted by Section 408 of the Companies Act 2006,

the Company has not presented its own profit and loss account.

A loss of £0.4m (2022: £1.4m loss) is dealt with in the financial

statements of the Company.

5. Directors’ remuneration

Details of Directors’ remuneration for the Company are included

in the Directors’ Remuneration report within the Elementis plc

Annual Report and Accounts on pages 96 to 122.

6. Investments

Unlisted

shares at cost

£m

Unlisted

loans

£m

Capital

contributions

£m

Total

£m

Cost at 1 January 2023 0.1 759.0 23.6 782.7

Additions – – 3.3 3.3

Net book value at 31 December 2023 0.1 759.0 26.9 786.0

Net book value at 31 December 2022 0.1 759.0 23.6 782.7

186

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Annual Report and Accounts 2023

6. Investments continued

The investment in unlisted loans is with Elementis Holdings Limited, an indirect wholly owned subsidiary. The investments in unlisted

shares are in Elementis Group BV, Elementis Export Sales Inc, and Elementis Overseas Investments Limited, all wholly owned

subsidiaries. Capital contributions relate to share-based payment awards made to employees of subsidiary companies.

The trading subsidiaries and associates of Elementis plc, all of which are wholly owned, excluding Alembic Manufacturing Limited,

in which the Group holds a 25% interest, are as follows:

Subsidiary undertakings Country of incorporation and operation

Alembic Manufacturing Limited Personal Care products United Kingdom

Deuchem Co., Limited Additives and resins Taiwan

Deuchem (Shanghai) Chemical Co. Limited Additives and resins People’s Republic of China

Elementis (Shanghai) New Material

Co. Limited

Additives and resins People’s Republic of China

Elementis Minerals BV Talc products Netherlands

Elementis Specialties (Anji) Limited Organoclays People’s Republic of China

Elementis Specialties do Brasil Quimica Ltda Coatings additives Brazil

Elementis Specialties Inc Rheological additives, colourants, waxes,

other specialty additives

United States of America

Elementis SRL Inc Personal Care products United States of America

Elementis UK Limited trading as:

Elementis Specialties

Rheological additives, colourants, waxes,

other specialty additives

United Kingdom

Elementis Pharma GmbH Personal Care products Germany

Mondo Minerals Deutschland GmbH Talc products Germany

Elementis Minerals Nickel Oy Talc products Finland

Mondo Trading (Beijing) Company Limited Talc products People’s Republic of China

1 Registered office: Unit 6 Wimbourne Buildings, Atlantic Way, Barry Docks, Barry, South Glamorgan CF63 3RA, UK.

2 Registered office: 92, Kuang-Fu North Road, Hsinchu Industrial Park, Hukou, Hsinchu Taiwan, ROC.

3 Registered office: 99 Lianyang Road, Songjiang Industrial Zone, Shanghai, China.

4 Registered office: 1209 Orange Street, Wilmington, Delaware, 19801, US.

5 Registered office: Kajuitweg 8, 1041 AR, Amsterdam, Netherlands.

6 Registered office: Huibutai, Majiadu Village, Dipu Town, Anji County, Huzhou City, Zhejiang Province, China.

7 Registered office: Rodovia Nelson Leopoldino, SP 375, Km 13,8, s/n, Bairro Rural, Palmital, São Paulo, Brazil.

8 Registered office: The Bindery, 5th Floor, 51-53 Hatton Garden, London EC1N 8HN, UK.

9 Registered office: Giulinistr. 2, 67065 Ludwigshafen, Germany.

10 Registered office: Friedrichsallee 14, 42117, Wuppertal, Germany.

11 Registered office: Talkkitie 7, 83500, Outokumpu, Finland.

12 Registered office: Nan Zhugan Hutong no.6, floor 9, 01-007, Dongcheng District, 100010, Beijing, China.

Non-trading and dormant subsidiaries of Elementis plc, all of which are wholly owned within the Group, are as follows:

Subsidiary undertakings Country of incorporation and operation

Agrichrome Limited Non-trading United Kingdom

Elementis America Shared Services Inc Dormant United States of America

Elementis Australia Limited

Dormant United Kingdom

Elementis Catalysts Inc Dormant United States of America

Elementis Chemicals Inc Dormant United States of America

Elementis Eaglescliffe Limited Non-Trading United Kingdom

Elementis Export Sales Inc Non-trading United States of America

Elementis Finance (Australia) Limited

Dormant United Kingdom

Elementis Finance (Europe) Limited Non-trading United Kingdom

Elementis Finance (Germany) Limited Non-trading United Kingdom

Elementis Finance (Ireland) Limited Non-trading Ireland

Elementis Finance (Jersey) Limited Non-trading Jersey

Elementis Finance (US) Limited Non-trading United Kingdom

Elementis Germany GmbH Non-trading Germany

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Elementis plc

Annual Report and Accounts 2023

Subsidiary undertakings Country of incorporation and operation

Elementis Germany Limited Dormant United Kingdom

Elementis Global LLC Non-trading United States of America

Elementis GmbH Non-trading Germany

Elementis Group (Finance) Limited Non-trading United Kingdom

Elementis Group BV Non-trading Netherlands

Elementis Group Limited Dormant United Kingdom

Elementis Holdings Limited Non-trading United Kingdom

Elementis London Limited Dormant United Kingdom

Elementis Minerals Holding BV Non-trading Netherlands

Elementis Nederlands BV Non-trading Netherlands

Elementis New Zealand Limited

Dormant United Kingdom

Elementis NZ Limited Non-trading New Zealand

Elementis Overseas Investments Limited Non-trading United Kingdom

Elementis Pigments Inc Dormant United States of America

Elementis Portugal, Unipessoal Lda Non-trading Portugal

Elementis S.E.A. (Malaysia) Sdn Bhd Non-trading Malaysia

Elementis Securities Limited Non-trading United Kingdom

Elementis Services GmbH Non-trading Germany

Elementis Specialties (India) Private Limited Non-trading India

Elementis US Holdings Inc Non-trading United States of America

Elementis US Limited Non-trading United Kingdom

H & C Acquisitions Limited

Dormant United Kingdom

H & C Lumber Inc Dormant United States of America

Harcros Chemicals Canada Inc Dormant Canada

Iron Oxides S.A. de CV Dormant Mexico

Mondo Minerals International BV Dormant Netherlands

NB Chrome Limited

Dormant United Kingdom

Reheis Inc Non-trading United States of America

SRL Coöperatief U.A. Non-trading Netherlands

SRLH Holdings Inc Non-trading United States of America

SRL International Holdings LLC Non-trading United States of America

Talc Holding Finance Oy Non-trading Finland

Talc Holding Oy Non-trading Finland

WBS Carbons Acquisitions Corp Non-trading United States of America

1 Registered office: The Bindery, 5th Floor, 51-53 Hatton Garden, London EC1N 8HN, UK.

2 Registered office: 1209 Orange Street, Wilmington, Delaware, 19801, US.

3 Registered office: 8th Floor, Block E, Iveagh Court, Harcourt Road, Dublin 2, Ireland.

4 Registered office: 3rd Floor, 44 Esplanade, St Helier, Jersey, JE4 9WG.

5 Registered office: Stolberger Str.370, 50933, Köln, Germany.

6 Registered office: Kajuitweg 8, 1041 AR, Amsterdam, Netherlands.

7 Registered office: KPMG, P O Box 1584, 18 Viaduct Harbour Avenue, Maritime Square, Auckland, New Zealand.

8 Registered office: c/o Avenida da Boavista, Numbero 3265 – 2.8 Porto, 4100-137 Porto, Portugal.

9 Registered office: 10th Floor, Menara Hap Seng, No. 1 & 3 Jalan P. Ramlee, 50250 Kuala Lumpur, Malaysia.

10 Registered office: Unit-B, Ground Floor, Jaswanti Landmark, Mehra Industrial Estate, L.B.S. Marg, Vikhroli (W), Mumbai 400079, India.

11 Registered office: C/o Stewart McKelvey Stirling Scales,44 Chipman Hill, Suite 1000 ON E2L 4S6, Canada.

12 Registered office: Calle San Ignacio N 105, 22106 Tijuana, Baja California Mexico.

13 Registered office: Kajaanintie 54, 88620, Korholanmaki, Finland.

* Five entities were applied for strike off in November 2023.

6. Investments continued

Notes to the company financial statements of Elementis plc

continued

188

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Annual Report and Accounts 2023

6. Investments continued

Notes:

Other than Elementis Export Sales Inc, Elementis Group BV and

Elementis Overseas Investments Ltd, none of the undertakings

is held directly by the Company. Equity capital is in ordinary

shares and voting rights equate to equity ownership.

All undertakings listed above have accounting periods ending

31 December, with the exception of Elementis Specialties

(India) Private Limited, for which the relevant date is 31 March,

and Elementis Eaglescliffe Limited, for which the relevant date

is 31 July.

Undertakings operating in the United Kingdom are incorporated

in England and Wales. In the case of corporate undertakings

not in the United Kingdom, their country of operation is also

their country of incorporation.

All undertakings listed above have been included in the

consolidated financial statements of the Group for the year.

7. Debtors

2023

£m

2022

£m

Debtors: Amount falling due

after more than one year

Group relief receivable 12.7 12.7

Debtors: Amount falling due

within one year

Group relief receivable – –

8. Creditors: Amount falling due within

one year

2023

£m

2022

£m

Accruals – 0.6

9. Share capital and reserves

2023

Number

’000

2023

£m

2022

Number

’000

2022

£m

Called-up allotted

and fully paid:

Ordinary shares of

5 pence each

At 1 January 584,017 29.2 581,858 2 9.1

Issue of shares 3,807 0.2 2,159 0.1

At 31 December 587,824 29.4 584,017 29.2

During the year a total of 3,807,146 ordinary shares with an

aggregate nominal value of £190,357 were allotted and issued

in accordance with the Group’s share options and award plans

and schemes to various employees, as well as shares that were

redeemed for cash at subscription prices between 58 pence and

93 pence on the exercise of options under the Group’s share

option schemes. The total subscription monies received by

the Company for these shares was £0.5m.

The Company can redeem shares by repaying the market value to

the shareholder, whereupon the shares are cancelled. Redemption

must be from distributable profits. The capital redemption reserve

represents the nominal value of the shares redeemed.

The share options reserve comprises amounts accumulated

in equity in respect of share options and awards granted

to employees.

Details of the shared based payments in the year are set out in

Note 26 to the Elementis plc consolidated financial statements.

10. Related party transactions

The Company, which is the ultimate parent company of the

Elementis Group, is a guarantor to the Elementis Group defined

benefit pension scheme under which it guarantees all current

and future obligations of UK subsidiaries currently participating in

the pension scheme to make payments to the scheme, up to

a specified maximum amount. The maximum amount of the

guarantee is that which is needed (at the time the guarantee is

called on) to bring the scheme’s funding level up to 105% of

its liabilities, calculated in accordance with section 179 of the

Pensions Act 2004. This is also sometimes known as a PPF

guarantee, as having such a guarantee in place reduces the

annual PPF levy on the scheme. Details of the UK pension

schemes in the year are set out in Note 25 to the Elementis plc

consolidated financial statements.

11. UK registered subsidiaries exempt

from audit

The following UK subsidiaries will take advantage of the audit

exemption set out within section 479A of the Companies Act 2006

for the year ended 31 December 2023. Unless otherwise stated,

the undertakings listed below are all 100% owned, either directly

or indirectly, by Elementis plc. The Company will guarantee the

debts and liabilities of the UK subsidiaries listed below at the

balance sheet date in accordance with section 479C of the

Companies Act 2006. The Company has assessed the probability

of loss under the guarantee as remote.

Name

Proportion of

shares held

by the

Company (%)

Proportion of

shares held

by subsidiary

(%)

Company

Number

Agrichrome Limited 100 – 2228826

Elementis Finance

(Germany) Limited 100 – 5531634

Elementis Finance

(US) Limited 100 – 9303101

Elementis Germany

Limited 100 – 48664

Elementis Group

(Finance) Limited 100 – 9303017

Elementis Group Limited 100 – 4048541

Elementis Overseas

Investments Limited 100 – 8008981

Elementis

Securities Limited 100 – 597303

Elementis US Limited 100 – 8005226

Elementis Finance

(Europe) Limited 100 – 11717371

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Annual Report and Accounts 2023

Alternative performance measures

A reconciliation from reported profit for the year to adjusted

earnings before interest, tax, depreciation and amortisation

(Adjusted EBITDA) is provided to support understanding of the

summarised cash flow included within the Finance Report on

pages 55 to 59.

2023

2022

Profit/(loss) for the year 26.5 (51.1)

Adjustments for:

Loss/(profit) from

discontinued operations 1.7 (11. 5)

Finance income (4.4) (9.9)

Finance costs and other expenses 23.5 22.9

Tax charge 11.5 7. 8

Depreciation and amortisation 54.7 56.6

Excluding intangibles arising

on acquisition (12.7) (14.9)

Adjusting items before finance

costs and depreciation 45.0 141.9

Adjusted EBITDA 145.8 141.8

There are also a number of key performance indicators (“KPIs”)

on pages 24 to 25, the reconciliations to these are given below.

Adjusted operating cash flow

Adjusted operating cash flow is defined as the net cash flow from

operating activities less net capital expenditure but excluding

income taxes paid or received, interest paid or received, pension

contributions net of current service cost and adjusting items.

2023

2022

Net cash flow from operating activities 76.8 77.0

Less:

Net cash flow used in operating

activities from discontinued operations 12.4 (5.6)

Capital expenditure (38.2) (33.7)

Add:

Income tax paid or received 27.3 13.3

Interest paid or received 18.1 14.6

Pension contributions net of

current service cost 3.1 0.7

Adjusting items – non cash 0.2 (2.6)

Adjusting items – cash 5.6 2.0

Adjusted operating cash flow 105.3 65.7

Adjusted operating cash conversion

Adjusted operating cash conversion is defined as adjusted

operating profit divided by adjusted operating cash flow plus

provisions and share based payments.

2023

2022

Adjusted operating profit 103.9 123.7

Adjusted operating cash flow 105.3 64.2

Add:

Provisions and share

based payments 4.4 3.6

109.7 67. 8

Adjusted operating cash conversion 106% 55%

1 2022 includes discontinued operations.

Contribution margin

The Group’s contribution margin is defined as sales less all

variable costs, divided by sales, and expressed as a percentage.

2023

2022

Revenue 713.4 736.4

Variable costs (361.2) (388.3)

Non variable costs (67.9) (49.2)

Cost of sales (429.1) (4 37. 5)

Adjusted group profit before tax

Adjusted group profit before tax is defined as the adjusted profit

for the year plus the tax on adjusting items.

Adjusted return on operating capital employed

ROCE is defined as adjusted operating profit from total

operations divided by operating capital employed, expressed as

a percentage. Operating capital employed comprises fixed assets

(excluding goodwill), working capital and operating provisions.

Operating provisions include self insurance and environmental

provisions but exclude retirement benefit obligations.

2023

2022

Adjusted operating profit 103.9 100.5

Fixed assets excluding goodwill 612.0 583.2

Working capital 147.2 141.5

Operating provisions (81.9) (28.6)

Operating capital employed 677.3 6 9 6 .1

Return on capital employed % 15% 14%

Alternative performance measures

and unaudited information

190

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Annual Report and Accounts 2023

Average trade working capital to sales ratio

The trade working capital to sales ratio is defined as the 12 month

average trade working capital divided by sales, expressed as a

percentage. Trade working capital comprises inventories, trade

receivables (net of provisions) and trade payables. It specifically

excludes repayments, capital or interest related receivables

or payables, changes due to currency movements and items

classified as other receivables and other payables.

Adjusted operating profit/Operating margin

Adjusted operating profit is the profit derived from the normal

operations of the business. Adjusted operating margin is the

ratio of adjusted operating profit to sales.

Unaudited information

To support a full understanding of the performance of the

Group, the information below provides the calculations of

net debt/EBITDA.

2023

2022

Revenue from total operations 727.8 921.4

Adjusted operating profit from

total operations 104.1 123.7

Adjusted operating margin from

total operations 14.3% 13.4%

Net Debt/EBITDA pre-IFRS 16

Adjusted EBITDA from total operations 146.8 173.1

IFRS 16 adjustment from

total operations (6.5) (7.1)

Adjusted EBITDA pre-IFRS 16

from total operations 140.3 166.0

Net Debt

202.0 366.8

Net Debt/EBITDA pre-IFRS 16 1.4 2.2

Net Debt/EBITDA post-IFRS 16

Adjusted EBITDA from total operations 146.8 173.1

Net Debt

202.0 366.8

IFRS 16 lease liabilities 35.6 36.7

Net Debt including lease liabilities 237.6 403.5

Net Debt/EBITDA post-IFRS 16 1.6 2.3

1 See Note 28. Net debt excludes lease liabilities.

Strategic Report

191

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Annual Report and Accounts 2023

Financial StatementsCorporate Governance Shareholder Information

Five year record

2023

2022

2021

2020

2019

Turnover:

Continuing operations 713.4 736.4 709.4 612.4 712.4

Discontinued operations 14.4 185.0 170.7 146.9 171.0

Total operations 727.8 921.4 880.1 759.3 883.4

Adjusted operating profit:

Total operations 104.1 123.7 106.6 81.6 123.0

Discontinued operations 0.2 23.2 18.6 10.4 22.3

Continuing operations 103.9 100.5 88.0 71.2 100.7

Adjusting items before interest 45.0 (142.3) (76.1) (106.5) (22.0)

Operating profit/(loss) 58.9 (41.8) 11.9 (35.3) 78.7

Other expenses (2.3) (1.3) (3.7) (1.2) (10.4)

Net interest payable (16.9) (11.7) (15.7) (37.6) (28.0)

Profit/(loss) before tax 39.7 (54.8) (7.5 ) (74.1) 40.3

Tax (11.5) (7.8) (0.4) 3.1 (10.2)

Profit/(loss) from continuing operations 28.2 (62.6) (7.9) (71.0) 3 0.1

(Loss)/profit from discontinued operations (1.7) 11.5 10.4 4.0 16.3

Profit/(loss) attributable to equity holders of the parent 26.5 (51.1) 2.5 (67.0) 46.4

2023

2022

2021

2020

2019

Continuing operations:

Basic earnings/(loss) per ordinary share (cents) 4.8 (10.7) (1.4) (12.2) 5.2

Basic earnings per ordinary share after adjusting items (cents) 11.0 11.1 8.4 5.5 9.7

Diluted earnings/(loss) per ordinary share (cents) 4.7 (10.7) (1.4) (12.2) 5.1

Diluted earnings per ordinary share after adjusting items (cents) 10.8 10.9 7.3 5.4 9.6

Continuing and discontinued operations:

Basic earnings/(loss) per ordinary share (cents) 4.5 (8.8) 0.4 (11.5) 8.0

Basic earnings per ordinary share after adjusting items (cents) 11.0 14.2 10.7 6.6 12.6

Diluted earnings/(loss) per ordinary share (cents) 4.4 (8.8) 0.4 (11. 3) 7.9

Diluted earnings per ordinary share after adjusting items (cents) 10.8 13.9 10.6 6.5 12.4

Dividend per ordinary share (cents) 2.1 – – – 8.6

Interest cover

(times) 6.2 6.6 4.8 3.7 5.5

Equity attributable to holders of the parent 847.3 783.9 901.0 860.4 906.2

Net debt (202.0) (366.8) (401.0) (408.1) (454.2)

Weighted average number of ordinary shares in issue during

the year (million) 585.7 582.6 581.0 5 8 0.1 579.6

Weighted average number of ordinary and potential ordinary

shares in issue during the year (million) 596.9 592.3 588.8 593.7 588.5

1 Ratio of operating profit after adjusting items to interest on net borrowings.

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Shareholder services

Registrars

Enquiries concerning shares or shareholdings, such as the

loss of a share certificate, consolidation of share certificates,

amalgamation of holdings or dividend payments, should be

addressed to the Company’s registrars:

Equiniti Group Limited

Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA

Tel: +44 (0) 371 384 2379

For deaf or speech impaired customers, Equiniti welcome calls via

Relay UK. Please see www.relayuk.bt.com for more information.

Please use the country code when calling from outside the UK.

Lines are open between 8.30am and 5.30pm Monday to Friday

(excluding public holidays in England and Wales).

In any correspondence with the registrars, please refer to

Elementis plc and state clearly the registered name and address

of the shareholder. Please notify the registrars promptly of any

change of address.

Website

Our website (www.elementis.com) provides the following information:

Company news and information

Details of our strategy

The Company’s approach to sustainability and innovation

A dedicated Investors section which contains up to date

information for shareholders including:

Share price and index chart information

Financial results

History of dividend payment dates and amounts

Access to current and historical shareholder documents

such as the Annual Report and Accounts

Share dealing services

Equiniti provides a share dealing service that enables shares

to be bought or sold by UK shareholders by telephone

or over the internet. For telephone share dealing, please

call +44 (0) 345 603 7037 between 8.30am and 4.30pm

(lines are open until 6.00pm for enquiries). For internet share

dealing, please visit: www.shareview.co.uk/dealing

Electronic communications

Shareholders can elect to receive shareholder

documents electronically by registering with Shareview at

www.shareview.co.uk. This will save on printing and distribution

costs, creating environmental benefits. When you register,

you will be sent an email notification to say when shareholder

documents are available on our website and you will be provided

with a link to that information. When registering, you will need

your shareholder reference number, which can be found on your

share certificate or proxy form. Please contact Equiniti if you

require any assistance or further information.

Duplicate documents

If you have more than one account on the Share Register and

receive duplicate documentation from us as a result, please

contact Equiniti to request that your accounts be combined.

Share fraud

Share or investment scams are often run from ‘boiler rooms’

where fraudsters cold call investors offering them worthless,

overpriced or even non-existent shares, or offer to buy their

shares in a company at a higher price than the market value.

Shareholders are advised to be very wary of any unsolicited

advice, offers to buy shares at a discount, or offers of free reports

about the company. Even seasoned investors have been caught

out by such fraudsters. The FCA has some helpful information:

www.fca.org.uk/scamsmart

Report a scam

If you are contacted by a cold caller, you should inform

the Secretariat (company.secretariat@elementis.com)

and also the FCA by using its share fraud reporting form at

www.fca.org.uk/scams or by calling its Consumer Helpline

on +44 (0) 800 111 6768.

If you have already paid money to a share fraudster,

please contact Action Fraud on +44 (0) 300 123 2040

or www.actionfraud.police.uk

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Financial StatementsCorporate Governance Shareholder Information

Corporate information

Financial calendar (provisional)

30 April 2024 Annual General Meeting

30 April 2024 Q1 Trading Update

1 August 2024 Interim Results 2024

October 2024 Q3 Trading Update

31 December 2024 Financial Year End

January 2025 Q4 Trading Update

The financial calendar is updated on a regular basis throughout the year.

Please refer to our website www.elementis.com for up-to-date details.

Annual General Meeting

The Annual General Meeting of Elementis plc will be held on

30 April 2024 at 10.00am at the offices of Allen & Overy LLP,

One Bishops Square, London, E1 6AD. Shareholders will also

be able to attend the meeting online.

The Notice of Meeting is included in a separate document.

Company Secretary

Anna Lawrence

Registered number

03299608

Registered office

The Bindery

5th Floor

51-53 Hatton Garden

London

EC1N 8HN

Principal offices

Elementis plc

The Bindery

5th Floor

51-53 Hatton Garden

London

EC1N 8HN

Tel: +44 208 148 5966

Elementis Global

469 Old Trenton Road

East Windsor

NJ 08512

Tel: +1 609 443 2000

Independent Auditors

Deloitte LLP

1 Little New Street

London

EC4A 3TR

Joint Corporate Broker

JP Morgan Cazenove

60 Victoria Embankment

London

EC4Y 0JP

Joint Corporate Broker

Numis

Cheapside House

138 Cheapside

London

EC2V 6LH

Public Relations

Teneo

2nd Floor

85 Fleet Street

London

EC4Y 1AE

Solicitors

Allen & Overy LLP

One Bishops Square

London

E1 6AD

company.secretariat@elementis.com

Website

www.elementis.com

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GRI index

Statement of use Elementis plc has reported the information cited in this GRI content index for the period 1 January 2023 to

31 December 2023 with reference to the GRI standards.

GRI used GRI 1: Foundation 2021

GRI standard Specific GRI Disclosure Pages

GRI 2: General

disclosures 2021

2-1 Organisational details 1-2

2-2 Entities included in the organisation’s sustainability reporting 41, 187-188

2-3 Reporting period, frequency and contact point Inside front

cover, 194

2-4 Restatements of information 29, 42, 43

2-5 External assurance 40

2-6 Activities, value chain and other business relationships 3, 7, 53, 61-63

2-7 Employees 47

2-8 Workers who are not employees Not disclosed

2-9 Governance structure and composition 74-77, 86-87

2-10 Nomination and selection of the highest governance body 84-87

2-11 Chair of the highest governance body 74

2-12 Role of the highest governance body in overseeing the management of impacts 78-82

2-13 Delegation of responsibility for managing impacts 32

2-14 Role of the highest governance body in sustainability reporting 32

2-15 Conflicts of interest 84-85, 94

2-16 Communication of critical concerns 79-81

2-17 Collective knowledge of the highest governance body 87

2-18 Evaluation of the performance of the highest governance body 83, 85

2-19 Remuneration policies 97-122

2-20 Process to determine remuneration 99-102

2-21 Annual total compensation ratio 119

2-22 Statement on sustainable development strategy 4 -5, 11

2-23 Policy commitments 54

2-24 Embedding policy commitments 54

2-25 Processes to remediate negative impacts 52, 79, 91

2-26 Mechanisms for seeking advice and raising concerns 52, 80-81

2-27 Compliance with laws and regulations 27, 46, 52, 88-92

2-28 Membership associations 27, 52

2-29 Approach to stakeholder engagement 26-28

2-30 Collective bargaining agreements 47

GRI 3: Material

Topics 2021

3-1 Process to determine material topics 33

3-2 List of material topics 33

3-3 Management of material topics 32-54

GRI 201: Economic

performance 2016

201-2 Financial implications and other risks and opportunities due to climate change 36-40, 132, 141

201-3 Defined benefit plan obligations and other retirement plans 48, 58-59

201-4 Financial assistance received from government 145

GRI 205:

Anti-corruption 2016

205-2 Communication and training about anti-corruption policies and procedures 51-52

205-3 Confirmed incidents of corruption and actions taken Zero incidents,

GRI 206: Anti-competitive

Behaviour 2016

206-1 Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices 54

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Financial StatementsCorporate Governance Shareholder Information

GRI standard Specific GRI Disclosure Pages

GRI 207: Tax 2019 207-1 Approach to tax 53, 57, 145, 161,

181

207-2 Tax governance, control, and risk management 145

207-3 Stakeholder engagement and management of concerns related to tax 57, 14 5

207-4 Country-by-country reporting 154

GRI 302: Energy 2016 302-1 Energy consumption within the organisation 40

302-3 Energy intensity 40

302-4 Reduction of energy consumption 40

GRI 303: Water and

Effluents 2018

303-3 Water withdrawal 42-43

303-4 Water discharge 42-43

303-5 Water consumption 42-43

GRI 304:

Biodiversity 2016

304-4 IUCN Red List species and national conservation list species with habitats in

areas affected by operations

GRI 305: Emissions 2016 305-1 Direct (Scope 1) GHG emissions 39-41

305-2 Energy indirect (Scope 2) GHG emissions 39-41

305-3 Other indirect (Scope 3) GHG emissions 39-41

305-4 GHG emissions intensity 39-41

305-5 Reduction of GHG emissions 39

305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions 42-43

GRI 306: Waste 2020 306-3 Waste generated 42-43

GRI 401:

Employment 2016

401-1 New employee hires and employee turnover 47

401-2 Benefits provided to full-time employees that are not provided to temporary or

part-time employees

401-3 Parental leave 47

GRI 403: Occupational

Health and Safety 2018

403-1 Occupational health and safety management system 45-46

403-2 Hazard identification, risk assessment, and incident investigation 45-46

403-4 Worker participation, consultation, and communication on occupational

health and safety

45-46

403-5 Worker training on occupational health and safety 45-46

403-6 Promotion of worker health 46, 48

403-8 Workers covered by an occupational health and safety management system 45-46

403-9 Work-related injuries 25, 46, 47

403-10 Work-related ill health 25, 46, 47

GRI 404: Training and

Education 2016

404-1 Average hours of training per year per employee 49, 50, 52

404-2 Programme for upgrading employee skills and transition assistance programme 49

404-3 Percentage of employees receiving regular performance and career

development reviews

GRI 405: Diversity and

Equal Opportunity 2016

405-1 Diversity of governance bodies and employees 48, 87

405-2 Ratio of basic salary and remuneration of women to men 47

GRI 406: Non-

discrimination 2016

406-1 Incidents of discrimination and corrective actions taken 52

GRI 417: Marketing

and Labeling 2016

417-1 Requirements for product and service information and labelling 52-53

GRI 418: Customer

Privacy 2016

418-1 Substantiated complaints concerning breaches of customer privacy and

losses of customer data

GRI index

continued

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SASB index

Topic Accounting Metric SASB code Page

Greenhouse

Gas Emissions

Gross global Scope 1 emissions, percentage covered under

emissions-limiting regulations

RT- C H -110 a.1 39-41

Discussion of long-term and short-term strategy or plan to manage

Scope 1 emissions, emissions reduction targets, and an analysis of

performance against those targets

RT- CH -110a.2 34-40

Air Quality Air emissions of the following pollutants: (1) nitrogen oxides

(excluding N2O), (2) sulfur oxides, (3) volatile organic compounds,

and (4) hazardous air pollutants

RT- C H -120a.1 42-43

Energy Management (1) Total energy consumed, (2) percentage grid electricity,

(3) percentage renewable, (4) total self-generated energy

RT- C H -130a.1 40-41

Water Management (1) Total water withdrawn, (2) total water consumed, percentage of

each in regions with high or extremely high baseline water stress

RT- C H -140a.1 42-43

Number of incidents of non-compliance associated with water

quality permits, standards, and regulations

RT-CH-140a.2 46

Description of water management risks and discussion of

strategies and practices to mitigate those risks

RT-CH-140a.3 38, 42, 44

Hazardous Waste

Management

Amount of hazardous waste generated, percentage recycled RT- CH-15 0a.1 42-43

Community Relations Discussion of engagement processes to manage risks and

opportunities associated with community interests

RT- C H -210a.1 27

Workforce Health

& Safety

(1) Total recordable incident rate and (2) fatality rate for

(a) direct employees and (b) contract employees

RT- C H - 320a.1 25, 45-46

Description of efforts to assess, monitor, and reduce exposure of

employees and contract workers to long-term (chronic) health risks

RT-CH-320a.2 45-46

Product Design for

Use-phase Efficiency

Revenue from products designed for use phase resource efficiency RT- CH - 410 a.1 63

Safety & Environmental

Stewardship of

Chemicals

(1) Percentage of products that contain Globally Harmonized

System of Classification and Labelling of Chemicals, Category 1

and 2 Health and Environmental Hazardous Substances,

(2) percentage of such products that have undergone

a hazard assessment

RT- C H - 410b.1 52-53

Discussion of strategy to (1) manage chemicals of concern

and (2) develop alternatives with reduced human and/or

environmental impact

RT- CH-410b.2 52-53

Genetically Modified

Organisms

Percentage of products by revenue that contain genetically

modified organisms

RT- C H - 410 c.1 Not disclosed

Management of the

Legal & Regulatory

Environment

Discussion of corporate positions related to government

regulations and/or policy proposals that address environmental

and social factors affecting the industry

RT-CH-530a.1 Not disclosed

Operational Safety,

Emergency

Preparedness

& Response

Process Safety Incidents Count, Process Safety Total Incident

Rate, and Process Safety Incident Severity Rate

RT-CH-540a.1 45-46

Number of transport incidents RT-CH-540a.2 Not disclosed

Activity metric Production by reportable segment RT-CH-000.A 43, 61-63

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Financial StatementsCorporate Governance Shareholder Information

Glossary

ACT Advance corporation tax

AGM Annual General Meeting

AI Artificial Intelligence

AOP Adjusted operating profit

AP Antiperspirant

APM Alternative performance measures

AWC Average working capital

B2B Business-to-business

Board Board of Directors of Elementis plc

CAPEX Capital expenditure

CDP Carbon Disclosure Project

CEO Chief Executive Officer

CFO Chief Financial Officer

CFD Climate related Financial Disclosures

CGU Cash generating unit

CHRO Chief Human Resources Officer

CMD Capital Markets Day

Carbon dioxide

e Carbon dioxide equivalent

COVID-19 Coronavirus pandemic

CP Current policies

CSA Climate scenario analysis

CSRD Corporate Sustainability Reporting Directive

DE&I Diversity, Equity and Inclusion

DNED Designated Non-Executive Director

DNR Department of Natural Resources

DSBP Deferred Share Bonus Plan

DT Delayed Transition

DTR Disclosure Guidance and Transparency Rules

E&C Ethics and Compliance

EA Environmental Agency

EBITDA Earnings before interest, tax, depreciation

and amortisation

ECC Ethics and Compliance Council

ECL Expected credit losses

ELT Executive Leadership team

EMEA Europe, Middle East and Africa

EPS Earnings per share

ERP Enterprise resource planning

ESC Elementis Sustainability Council

ESG Environmental, Social and Governance

ESOS Executive Share Option Scheme

ESOT Employee Share Ownership Trust

EU European Union

EUBA European Bentonite Association

FAQs Frequently asked questions

FBI Federal Bureau of Investigation

FCA Financial Conduct Authority

FCE Finance Company Exemption

FLAG Forest, Land and Agriculture

FRC Financial Reporting Council

FRS Financial Reporting Standards

FRV Federal Regulatory Violation

FTE Full time equivalent

FTSE Financial Times Stock Exchange

GBP Great British Pound

GDP Gross domestic product

GHG Greenhouse gases

GJ Gigajoule

GKA Global key accounts

GRI Global Reporting Initiative

GWh Gigawatt-hour

HAP Hazardous air pollutants

HMRC HM Revenue and Customs

HR Human resources

HSE Health, Safety and Environment

HRP+ Promotion of hazard recognition

IAS International Accounting Standards

IASB International Accounting Standards Board

IFRIC International Financial Reporting Standards

Interpretations Committee

IFRS International Financial Reporting Standards

IMA Industrial Minerals Association

IP Intellectual Property

IPCC Intergovernmental Panel on Climate Change

ISO International Organisation for Standardisation

ISSB International Sustainability Standards Board

IT Information technology

IUCN International Union for Conservation of Nature

KPI Key performance indicator

LCA Life-cycle analysis

LDI Liability driven investment

LPG Liquefied petroleum gas

LTA Lost time accidents

LTIP Long term incentive plan

Cubic metres

M&A Merger and acquisitions

MO DNR Missouri Department of Natural Resources

Mondo Mondo Minerals Holdings B.V. and its subsidiaries

MT Metric ton

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MWh Megawatt per hour

NBO New business opportunities

NED Non-Executive Director

NGFS Network for Greening the Financial Systems

NiSATs Non-ionic synthetic associative thickeners

NOx Nitrogen oxides

NZ Net Zero 2050

OCI Other comprehensive income

OPEX Operating expenditure

OSHA Occupational Safety and Health Administration

PAM Privileged Access Management

PBT Profit before tax

PHA Process hazard analysis

PM Particulate matter

PPF Pension Protection Fund

PRMB Post retirement medical benefit

PSE Process safety event

PwC PricewaterhouseCoopers LLP

Q&A Questions and answers

R&D Research and development

RA Replacement Awards

RCF Revolving credit facility

REACH Registration, Evaluation, Authorisation and Restriction

of Chemicals

ROCE Return on capital employed

s.172 Section 172 of the Companies Act 2006

SASB Sustainability Accounting Standards Board

SAYE Save As You Earn

SBT Science-based target

SBTi Science-based targets initiative

SDS Safety data sheets

SID Senior Independent Director

SME Small to medium sized enterprises

SOx Sulfur oxides

SRSOS Savings Related Share Option Scheme

SVHC Substances of Very High Concern

SVP Senior Vice President

SWA Stop Work Authority

TCFD Task Force on Climate-related Financial Disclosures

TMC Trademark Committee

TRIR Total recordable injury rate

TSR Total shareholder return

UK United Kingdom

UN United Nations

UN GC United Nations Global Compact

UN SDGs United Nations Sustainable

Development Goals

US United States

USD United States Dollar

VOC Volatile organic compound

WBCSD World Business Council for

Sustainable Development

WRI World Resources Institute

WWTP Waste water treatment plant

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Notes

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Annual Report and Accounts 2023

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Elementis plc Annual Report and Accounts 2023

Elementis plc

The Bindery

5th Floor

51-53 Hatton Garden

London EC1N 8HN