Synthomer 'navigating' geopolitical, tariff-related uncertainties

London – Synthomer plc has reported earnings (EBITDA) up 4.1% year-on-year to £77.8 million, on first-half sales down 9.8% at £925.3 million, on lower volumes due to tariff-related demand volatility.

The sales mainly comprised: Coatings & Construction Solutions (CCS) £34.5 million; Adhesive solutions £35.4 million; and Health & Protection and Performance materials £16.6 million.

Summarising, Synthomer said: Adhesive solutions continued to regain share and enhance margins; Health & Protection benefited from mix; Coatings & Construction Solutions saw relatively stable consumer and improving construction markets, offset by less oil & gas drilling activity.

The earnings gains were linked to ‘self-help’ actions including a “robust” pricing drive,” delivering £17 million in cost and reliability improvements, according to the UK group.

A further £9 million in savings is expected in the second half from a newly-implemented £20-25 million cost-reduction programme – intended to mitigate lower market demand due to trade tensions.

The group added that the impact of trade tariffs is largely being offset through surcharges, though the protectionist measures did increase demand volatility in the second quarter.

Targets going forward, it said, include innovation and capital deployment into key areas, including Middle East growth, lower carbon and circular adhesives for FMCG markets, and bio-based feedstocks for gloves markets.

Synthomer has delivered gross margin improvement and EBITDA growth in the period despite the challenging environment in our markets, said CEO Michael Willome.

The polymers group leader added that “our 'in region for region' manufacturing strategy positions us well to weather a more protectionist trade environment.

"We have clear plans in place to navigate the current geopolitical and tariff-related uncertainties in our markets, and remain confident in our objective to double Synthomer's recent earnings levels in the medium term.”

Synthomer, concluded Willome, will “reallocate capital towards those end markets [that] will benefit most as demand recovers, as European infrastructure and construction spending improves, housing market activity levels increase, the supply side for US disposable gloves evolves."