Element Solutions Inc has reported a strong growth in sales and profits during Q4 and full year in 2021. 

 

Net sales on a reported basis for the fourth quarter of 2021 were $647 million, an increase of 21% over the fourth quarter of 2020. Organic net sales, which exclude the impact of currency changes, certain pass-through metal prices and acquisitions, increased 2%. Reported net income was $6 million, as compared to $30 million for the fourth quarter of 2020. Adjusted EBITDA was $122 million, a decrease of 3%. On a constant currency basis, adjusted EBITDA decreased 2%.

 

For 2021, net sales on a reported basis were $2.40 billion, an increase of 29% over the prior full year period. Organic net sales increased 13%. Reported net income for the full year 2021 was $203 million, as compared to $77 million for 2020.  Adjusted EBITDA for the full year 2021 was $525 million, an increase of 24% as compared to 2020. On a constant currency basis, adjusted EBITDA increased 20%.

 

President and Chief Executive Officer Benjamin Gliklich commented, “Element Solutions had a record year in 2021 with strong growth in sales, adjusted EBITDA, adjusted EPS and free cash flow. In this unusual macro backdrop of both record demand and significant disruptions in raw material supply, logistics and labor, our organization continues to execute at a high level. Our results are a testament to the dedication of our exceptional global team as well as our culture of embracing challenges and delivering on our commitments. In 2021, we were also pleased to deploy a significant amount of capital strategically with high expected returns. We believe the acquisitions of Coventya and HK Wentworth will improve our growth rate in our core markets and attractive adjacencies.”

 

Gliklich continued, “The acceleration in high-end electronics markets that began in 2020 continued in 2021 and shows no indication of slowing in 2022. Expansion in 5G infrastructure and the mobile technologies associated with its rollout, increasing production of electric vehicles, and the rising demand for semiconductors in a variety of applications are all trends we expect to contribute to our growth for many years to come. At the same time, low auto inventories and strong underlying demand suggest medium-term cyclical tailwinds for our more industrially oriented businesses when supply chains normalize in 2022 and beyond. For the full year 2022, we expect solid organic growth and the contribution from Coventya's synergies to generate adjusted EBITDA of between $575 million and $590 million, a constant currency increase of 13% to 16%. We expect adjusted EPS to grow between 12% and 16% to a range of $1.55 to $1.60. Our expectation for full year 2022 free cash flow generation of between $310 million and $325 million would set another record, providing continued opportunities for the balanced, high-returning capital allocation we have demonstrated over the last three years.”

 

Gliklich concluded, “We have delivered on our vision and commitments in our first three years as Element Solutions running our excellent businesses better and deploying their strong free cash flows to become a best-in-class supplier to customers, create more opportunities for our people and compound per share earnings for our investors. We are pleased to have delivered on our initial 5-year target to double adjusted EPS in just three years, and we look forward to sharing our compelling path forward at our upcoming investor day.”

 

For the full year 2022, the Company expects adjusted EBITDA to be in the range of $575 million to $590 million, adjusted EPS in the range of $1.55 to $1.60 and free cash flow in the range of $310 million to $325 million. These results, if achieved, would be new annual records since the launch of Element Solutions in 2019. In addition, the Company expects first quarter 2022 adjusted EBITDA to be approximately flat year-on-year at constant currency.