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Unique Chemistry,
Sustainable
Solutions
Annual Report and Accounts 2022
CAUTIONARY STATEMENT
The Annual Report and Accounts for the financial year ended 31 December 2022, 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.
Making a difference through Innovation, Growth and Efficiency.
CONTENTS
STRATEGIC REPORT
Elementis today
Our business at a glance 2
2022 highlights 3
Purpose 4
Chair’s statement 6
Chief Executive Officer’s review 8
Our investment case 12
Our market environment 14
Supply chain in action 16
Our business model 18
Innovation at Elementis 22
Our strategy 24
Key performance indicators 32
Sustainability 34
Materiality 39
Climate strategy 42
Protecting the environment 57
Supportive culture 61
Responsible business 68
Non-financial information statement 71
Stakeholder engagement 72
Section 172(1) statement 74
Finance report 76
Operating review 82
Risk management 86
Principal risks and uncertainties 90
Viability and going concern statement 95
CORPORATE GOVERNANCE
Chair’s introduction
to governance 96
Board of Directors 98
Executive Leadership team 100
The UK Corporate
Governance Code 102
Division of responsibilities 103
Board leadership and
Company purpose 104
Stakeholder engagement 106
Workforce engagement 107
Shareholder engagement 110
Board responsibilities 111
Composition, succession
and evaluation 113
Nomination Committee report 115
Audit Committee report 119
Directors’ Remuneration report 124
Directors’ report 152
Directors’ responsibilities 155
FINANCIAL STATEMENTS
Independent auditor’s report 156
Consolidated income statement 164
Consolidated statement of
comprehensive income 164
Consolidated balance sheet 165
Consolidated statement of
changesinequity 166
Consolidated cash flow statement 167
Notes to the consolidated
financialstatements 168
Company balance sheet 215
Company statement of changes
in equity 216
Notes to the company financial
statements of Elementis plc 217
SHAREHOLDER INFORMATION
Alternative performance measures
andunaudited information 222
Five year record 224
Shareholder services 225
Corporate information 226
GRI index 227
Glossary 230
Elementis is a global specialty chemicals
company. We deliver unique chemistry,
sustainable solutions; our products
makeour customers’ formulations
look,feel and perform at their best.
Our purpose
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.
SUPPLY CHAIN
Our response to ongoing challenges
16
SUSTAINABILITY
Improved outcomes
36
INNOVATION
Key pillar for growth
22
WORKFORCE ENGAGEMENT
Programme of visits to the Company’s operations
107
Annual Report and Accounts 2022
Elementis plc
Q
A
How is Elementis delivering
onyour commitments,
nurturing your people and
livingyourpurpose?
At Elementis, we collaborate with our
customers to develop innovative and
sustainable solutions, while caring for our
people and protecting the environment.
Combining our leading positions in
rheology, surface modification and
formulation, access to unique natural
materials and global footprint, we create
high-value specialty additives that
enhance the performance of our
customers’ products and make a positive
change in the world.
We manufacture safely, responsibly and
effectively; we provide opportunities for
everyone at Elementis to connect to
others; to grow their experience and to
make a real impact.
STRATEGIC REPORT CORPORATE GOVERNANCE
FINANCIAL STATEMENTS SHAREHOLDER INFORMATION
Annual Report and Accounts 2022
Elementis plc
1
Our business at a glance
Who we are
Elementis is a specialty chemicals company with
over 1,300 employees, operating at 17 manufacturing
sites across the globe.
†
Founded in 1844, we are listed on the London Stock
Exchange and are a constituent of the FTSE 250 index.
What we do
We create specialty chemicals that deliver
crucial end product attributes across a range
of industries including cosmetics, coatings and
long life plastics. Innovation is at the heart of
what we do; our focus is on creating solutions that
deliver performance improvements and enhanced
sustainability credentials.
How we do it
Combining our leading positions in rheology
◊
, surface
modification and formulation, access to unique
natural materials and global footprint, we deliver
Enhanced Performance Through Applied Innovation
to our customers around the world.
†
Figures are post Chromium sale, which took place on 31 January 2023.
◊
Learn more about rheology and our technical expertise on pages 22-23.
* Effective 1 January 2023, the results of the Coatings and Talc
segmentswill be 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.
PERSONAL CARE
OVERVIEW
We are a leading global supplier of rheology
◊
modifiers
and anti-perspirant actives to personal care product
manufacturers. Our products help make skin creams
smooth, nail polish glow and anti-perspirants work.
COATINGS*
OVERVIEW
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 evenly.
TALC*
OVERVIEW
We are the second largest global supplier of talc
basedadditives to industrial end markets including
longlife plastics, technical ceramics and packaging
manufacturers. Talc helps to make long life plastics
stronger and lighter, gasoline particulate filters work
andfood packaging recyclable.
Sales
$212m
Adjusted operating
profit
$53m
Sales
$389m
Adjusted operating
profit
$73m
Sales
$136m
Adjusted operating
profit
$nil
Working with our customers across
theworldtosolve their product performance
and sustainability challenges
Read more on page 82
Read more on page 83
Read more on page 84
Annual Report and Accounts 2022
Elementis plc
2
FINANCIAL OPERATIONAL HIGHLIGHTS
Revenue Adjusted operating
profit
Adjusted operating
margin
Total recordable
incidentrate (TRIR)
$736.4m* $100.5m* 13.6%* 0.67
2020
$736.4m
$709.4m
$604.4m
2
021
2
022
2020
$88.0m
$100.5m
2
021
2
022
$71.2m
2020
13.6%
12.4%
2
021
2
022
11.8%
2020 0.68
0.67
0.90
2
021
2
022
Operating profit/(loss) Profit/(loss) before tax Net debt
2
Lost time accidents (LTA)
$(41.8)m* $(54.8)m* $(366.8)m 3
2020
$(41.8)m
$(35.3)m
$11.9m
2
021
2
022
2020
$(54.8
)m
$(7.5)m
$(74.1
)m
2
021
2
022
2020
$(366.8)m
$(401.0)m
$(408.1)m
2
021
2
022
2020 3
3
4
2
021
2
022
Diluted (loss)/earnings per
share
Adjusted diluted earnings
per share
1
Ordinary dividend
per share
Environmental incidents
(10.7)c* 10.9c* 0.0c 0
2
020
(10.7)c
(1.4)c
(12.2)c
2
021
2
022
020
10.9c
8.3c
5.4c
021
022
2
020 0.0c
0.0c
0.0c
2
021
2
022
* Amounts are presented for continuing operations only and exclude discontinued Chromium operations.
1 After adjusting items – see Note 5.
2 Please see the Alternative Performance Measures section on page 222.
2022 highlights
Where we operate
Global
Segments
2
Locations
worldwide
23
Continents
3
*
KEY
Continuing Operations
Discontinued Operations
* We have two sites in Taiwan 1kmfrom each other.
STRATEGIC REPORT CORPORATE GOVERNANCE
FINANCIAL STATEMENTS SHAREHOLDER INFORMATION
Annual Report and Accounts 2022
Elementis plc
3
Innovation
Growth Efficiency
Our Values, purpose and strategy
Our strategy
The right strategy is important to deliver business
growth,and a supportive culture is the catalyst
tosuccessful delivery.
Read more p24
Our Values
Our Values are core to our high-performance
culture and reflectedin everything that we do.
Our purpose
Unique Chemistry,
SustainableSolutions
At Elementis, we bring a distinctive
combination of expertise, innovation
and teamwork to every formulation
challenge. We create high-value
specialty additives that enhance