Synthomer has reported a year of resilient profitability and strong cash generation for FY 2025, despite weaker demand and a 10% fall in revenue, while signalling improving momentum into 2026.

 

The speciality polymer supplier posted continuing revenue of £1.74bn, down from £1.93bn in 2024, as volumes fell 7.2% year-on-year, driven by softer end-market demand following global tariff changes. Yet the group held firm on profitability, with EBITDA broadly stable at £136.5m versus £143.1m last year, supported by cost savings and improved product mix.

 

Margins improved across the business, with gross margin up 200bps and EBITDA margin rising to 7.8%, reflecting around £30m in self-help benefits and tighter operational discipline.

Performance across divisions was mixed. 

 

The Adhesive Solutions (AS) unit stood out, delivering a 37.8% rise in EBITDA to £66.0m, continuing to regain market share and expand margins. In contrast, Coatings & Construction Solutions (CCS) and Health & Protection and Performance Materials (HPPM) both saw declines due to lower demand and operating leverage pressure.

 

Underlying operating profit fell 21.8% to £37.6m, while the group reported a statutory operating loss of £50.2m, reflecting one-off items and restructuring impacts. The underlying loss before tax widened to £23.2m, and basic EPS dropped to -96.0p.

 

Despite the weaker profit headline, cash performance was a key strength. Free cash flow turned positive at £56.6m, a sharp improvement from a £54.7m outflow in 2024, while net debt fell to £575.0m, down from £597.0m at year-end 2024 and significantly below mid-year levels. Leverage remained comfortably within covenants at 4.7x EBITDA, with substantial liquidity headroom of £385.5m undrawn facilities.

 

The company also confirmed a major balance sheet milestone, with bank facilities refinanced through to 2029 and covenants reset, strengthening financial flexibility for its ongoing transformation programme.

 

Strategically, Synthomer continued to reshape its portfolio, completing further non-core divestments, reducing manufacturing sites from 43 to 29, and progressing towards a target of 25 or fewer. The group also launched 43 new products, many with sustainability benefits, and expanded partnerships to drive growth without heavy capital investment.

 

Looking ahead, trading in early 2026 is already showing improvement. Q1 was described as “in line with expectations and ahead of prior year,” with momentum building across all divisions. 

 

The company expects a stronger Q2 2026, citing pricing power, improved CCS performance, and stabilisation in AS.

 

“The key pillars of our strategy are delivering further margin progress through cost savings and operational excellence,” said CEO Michael Willome. “Our singular focus on these delivered a robust set of results in 2025 despite the challenging end-market conditions, and improving momentum at the start of 2026.”

 

He added that recent geopolitical disruption has shifted the operating environment in ways that are beginning to favour the group’s regional manufacturing footprint and improved operating leverage.

 

“From the beginning of the Iran conflict we have seen a changed operating environment where many of our key strengths… are proving to be beneficial,” Willome said. “We will remain focused on these same strategic objectives and operational discipline which we expect to deliver substantial value creation.”

 

Management said full-year 2026 expectations remain unchanged for now, with upside potential depending on demand recovery and continued self-help execution, though uncertainty remains around longer-term geopolitical impacts.