Synthomer plc
Spring 2025 trading statement

Q1 EBITDA ahead of prior year driven by self-help initiatives

Synthomer plc ('Synthomer' or the 'Group') today issues a scheduled update on trading for the first quarter of 2025, ahead of today's Annual General Meeting (AGM). Results of voting at the AGM will be announced later today.

·    Q1 2025 Continuing Group EBITDA and margin ahead of Q1 2024

·    Constant currency revenue growth and margin progress in AS and HPPM, partially offset by slower CCS markets, predominantly in energy solutions and the USA

·    Focused on delivering further cost and cash self-help programmes and strategic transformation objectives

·    'In region for region' manufacturing strategy provides resilience in a more protectionist market environment, with limited direct impact of tariffs anticipated

·    No change to our previously stated expectation of further earnings progress in 2025, recognising that end-market demand uncertainty increases in the event of a sustained period of elevated trade tensions

Continuing Group EBITDA and EBITDA margin increased in the first quarter of 2025, despite modestly lower volumes relative to the strong first quarter of the prior year, which benefited from the disruption to supply chains into Europe via the Red Sea and significant customer restocking. Our Adhesive Solutions (AS) and Health & Protection and Performance Materials (HPPM) divisions both delivered increased gross margin and EBITDA, principally through a further improvement in product and geographical mix and self-help cost efficiency programmes. In the Coatings & Construction Solutions (CCS) division, delayed energy orders and moderating end-market activity in the USA were only partially offset by improved construction activity in Europe. Robust pricing continued to be achieved across the Group, recognising lower energy and raw materials costs in the period.

We have made further progress in delivering our speciality solutions strategy, alongside our sustained focus on generating cash flow and reducing leverage. New speciality investments in the USA and the Middle East came onstream in the period and are immediately profit and cash accretive. We continue to progress the formal divestment processes for non-core businesses in Europe.

Our strategy of manufacturing close to our customers globally substantially mitigates our direct exposure to recent tariff announcements, which we are looking to offset through price. Our Health & Protection customers that are based in Malaysia are in a strong position to benefit relative to their China-based competitors as a result of the tariff changes. At the same time, geopolitical tensions have made end-market demand more unpredictable, particularly in the USA, which represents around 25% of our revenues. Notwithstanding this increased uncertainty, at this stage we continue to expect further earnings progress and positive Free Cash Flow in 2025, driven primarily by accelerating self-help benefits and delivery of our strategic plans.

Commenting, Synthomer CEO Michael Willome said:

"We delivered earnings growth in Q1 2025 against difficult market trends and a strong first quarter last year, largely through our relentless focus on our customers, costs and cash. Our 'in region for region' manufacturing strategy means we are in a robust position to weather a more protectionist trade environment. Alongside our ongoing prioritisation of deleveraging, we continue to rigorously allocate our resources to key growth opportunities across our global business. Although our end-markets face increasing macroeconomic and geopolitical uncertainty, our strategic transformation continues to enhance our ability to convert customer demand for our products into substantially greater profitability and returns."

Further information:

Notes

Synthomer plans to report interim results on 5 August 2025. Legal Entity Identifier (LEI): 213800EHT3TI1KPQQJ56. Classification as per DTR 6 Annex 1R: 3.1.

Synthomer plc is a leading supplier of high-performance, highly specialised polymers and ingredients that play vital roles in key sectors such as coatings, construction, adhesives, and health and protection - growing markets for customers who serve billions of end users worldwide. Headquartered in London, UK and listed there since 1971, we employ c.4,000 employees across our five innovation centres of excellence and 31 manufacturing sites across Europe, North America, Middle East and Asia. With more than 6,000 blue-chip customers and £2.0bn in continuing revenue in 2024, our business is built around three divisions, serving customers in attractive end markets where demand is driven by global megatrends including urbanisation, demographic change, climate change and sustainability, and shifting economic power. In Coatings & Construction Solutions, our specialist polymers enhance the sustainability and performance of a wide range of coatings and construction products. We serve customers in applications including architectural and masonry coatings, mortar modification, waterproofing and flooring, fibre bonding, and energy solutions. In Adhesive Solutions our products help our customers bond, modify and compatibilise surfaces and components for applications including tapes and labels, packaging, hygiene, tyres and plastic modification, improving permeability, strength, elasticity, damping, dispersion and grip. In Health & Protection and Performance Materials we are a world-leading supplier of water-based polymers for medical gloves, and a major European manufacturer of high-performance binders, foams and other products serving customers in a range of end markets. Our purpose is creating innovative and sustainable solutions for the benefit of customers and society. Around 20% of our sales volumes are from new and patent protected products. At our innovation centres of excellence in the UK, China, Germany, Malaysia and Ohio, USA we collaborate closely with our customers to develop new products and enhance existing ones tailored to their needs, with an increasing range of sustainability benefits. Our 2030 decarbonisation targets have been approved by the Science Based Targets initiative as being in line with what the latest climate science says is necessary to meet the goals of the Paris Agreement, and since 2021 we have held the London Stock Exchange Green Economy Mark, which recognises green technology businesses making a significant contribution to a more sustainable, low-carbon economy. Find us at www.synthomer.com or search for Synthomer on LinkedIn.