Synthomer (SYNT) H2 2025 earnings summary

Executive summary

• Delivered improved margins and robust trading performance in 2025 despite lower end-market demand and global tariff changes, with results in line with prior guidance and positive free cash flow.

• Strategic focus on specialty products, cost savings, and portfolio simplification drove resilience and operational progress, supported by ongoing transformation towards specialty chemicals.

• Refinanced bank facilities, extending maturities to 2029 and resetting covenants, ensuring financial stability.

• Divestment program broadened, with four active processes and the divestment of William Blythe to accelerate deleveraging and focus on core specialty businesses.

• Q1 2026 trading showed improving momentum, with robust volume and margin outlook for Q2 and potential upside risks for the year.

Financial highlights

• Group revenue for continuing business down 9.9% year-over-year to GBP 1.74 billion; volume down 7.2%.

• EBITDA reduced by 4.5% to GBP 137 million, but EBITDA margin expanded by 40 bps to 7.8% due to cost efficiencies; gross margin up 200 bps.

• Underlying operating profit at GBP 37.6 million, down 21%; underlying loss per share worsened to GBP 0.372, mainly due to tax asset derecognition.

• Net debt at GBP 575 million, GBP 22 million lower year-on-year; leverage at 4.7x, within covenant limits; positive free cash flow achieved.

• GBP 30 million in operating cost savings achieved in 2025, with further GBP 20–25 million targeted for 2026.

Outlook and guidance

• Expect robust improvement in volumes and margins in Q2 2026, with upside risks if current trading conditions persist.

• Full-year 2026 guidance unchanged, with self-help actions and specialty focus expected to drive year-on-year progress.

• Free cash flow for 2026 expected to be broadly neutral after adjusting for one-time receivables transaction.

• Dividend remains suspended until leverage falls below 2.5x.

• Wage inflation and bonus accrual normalization expected to partially offset gains.