operating margin
—
FY 2026
management target
ELEMENTIS PLC
Last · —$183.40-1.012 (-0.55%)live · yahoo · 1h ago
Market cap——
P/E · TTM20.2fwd — · eps —
Beta—vs S&P 500
Div yield—annual · TTM
52w range
——
Volume—session
| Revenue | $597.5M |
|---|---|
| Operating income | $109.0M |
| Net income | $-45.5M |
| Free cash flow | $51.9M |
| Operating margin | 18.2% |
| Net margin | -7.6% |
| Return on equity | -7.1% |
| Period | 2025 |
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OpenFilings analyst
Our analyst
Agentic read of the latest earnings call — recommendation updates when we process a new transcript. Research synthesis, not investment advice.
Strong BuyBuyHoldSellStrong Sell
Strong execution, but limited evidence yet that organic volume growth and the 2026 earnings bridge can offset the pharma disposal and weak Coatings demand.
Hold: Elementis delivered resilient 2025 execution—revenue fell 1.0% reported to $597.5m, but adjusted operating profit rose 4.6% to $126.7m, margin expanded 150bp to 21.2%, and adjusted EPS increased 14.2% to 13.7 cents. The portfolio is higher quality after Talc and pharma disposals, but the investment case still depends on unproven volume recovery and high-margin growth to reach the >23% operating-margin target; management offered no formal 2026 guidance and consensus comfort was stated before adjusting for the $35m pharma business disposal.
Themes
- Portfolio Simplification
- Pharma Disposal
- Personal Care
- Coatings
- Alchemy Acquisition
- Margin Expansion
Near term
Q1 started solidly, including an improvement in Coatings after a soft Q4; seasonality is expected to remain roughly 52% H1 / 48% H2.
The pharma sale to ABF is expected to close in Q2; proceeds are expected to be returned to shareholders, but analysts highlighted that consensus had not yet been adjusted for the lost $35m of revenue and roughly $3.5m of EBIT.
St. Louis debottlenecking has improved performance 20% since H1, with management targeting further progress toward the site’s 30% capacity opportunity.
The remaining $4m of announced cost savings is expected by the end of 2026, supporting the bridge from 2025 EBIT alongside volume growth and operating leverage.
Longer term
Personal Care is the strongest structural growth and margin driver: 2025 revenue rose 2.4% and operating margin reached 32.4%, while Coatings remained at 18.9% in a weak-demand environment.
The strategy targets mid-single-digit revenue growth, operating margins above 23%, cash conversion above 90%, and ROCE excluding goodwill above 30%.
Innovation sales reached a record 16.4%; management is targeting 20% over the medium term, with innovation products said to generate 5–10% higher margins than the rest of the portfolio.
Alchemy adds a high-growth, margin-accretive Personal Care bolt-on, but management stressed that the strategy is organic-led and that similarly accretive acquisitions may be scarce.
Hectorite, formulation expertise, and rheology provide differentiation, with expansion opportunities in skin care, geothermal drilling and other adjacent applications.
Red flags
2025 group volumes declined, driven by a $14.1m reduction in Coatings; management’s path to >23% margins relies increasingly on mix and growth rather than large restructuring benefits, with major reorganisations already complete.
Management said it was comfortable with consensus EBIT and sales, but clarified only after analyst pushback that this was before adjusting for the pharma disposal, leaving the true 2026 earnings baseline unclear.
Free cash flow fell to $41m from $51m, while 2026 is expected to include 4–5% capex, a working-capital outflow and the unwind of factoring.
The Coatings and Personal Care businesses share plants, laboratories and product knowledge, limiting strategic flexibility if Coatings underperforms; management rejected separation as the current focus.
Geopolitical uncertainty remains unquantified. Management expects to recover input-cost increases through pricing but provided no sensitivity or downside framework.
Forward outlook
Recommendation history
OpenFilings analyst view from primary-source filings and earnings calls — not investment advice.
From latest ANNUAL · 2026-04-07
- Net Margin Sharply Negative
Red flags
- Net Margin Sharply Negative — Net margin -7.6%
Earnings transcripts
- Issuer IR
2025 Full year results transcript
ELEMENTIS PLC
- Issuer IR
2025 Interim results transcript
ELEMENTIS PLC
- Issuer IR
2024 Full year results transcript
ELEMENTIS PLC
- Issuer IR
2024 Interim results transcript
ELEMENTIS PLC
- Issuer IR
2023 Full year results transcript
ELEMENTIS PLC
- Issuer IR
2023 CMD transcript
ELEMENTIS PLC
Documents
FormReporting forFiledFlags