Synthomer Q1 EBITDA grows despite 'modestly lower' volumes

(Sharecast News) - Chemicals business Synthomer said on Thursday that underlying earnings and margins had both improved year-on-year during Q1 despite "modestly lower" volumes, driven by self-help initiatives. Synthomer said its Adhesive Solutions and Health & Protection and Performance Materials divisions both delivered increased gross margins and underlying earnings, principally through a further improvement in product and geographical mix and self-help cost efficiency programmes.

However, in its Coatings & Construction Solutions unit, delayed energy orders and moderating end-market activity in the USA were only partially offset by improved construction activity in Europe. Synthomer also highlighted that "robust pricing" continued to be achieved across the group, recognising lower energy and raw materials costs in the period.

The FTSE 250-listed group also noted that its strategy of manufacturing close to customers globally "substantially mitigates" its direct exposure to recent tariff announcements, which it intends to offset through price. At the same time, Synthomer said geopolitical tensions had made end-market demand "more unpredictable", particularly in the USA, which represents around 25% of revenues. Despite this, Synthomer continues to expect further earnings progress and positive free cash flow in 2025.

Chief executive 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."

As of 0805 BST, Synthomer shares were down 2.19% at 80.50p.

Reporting by Iain Gilbert at Sharecast.com