Contents
Strategic report
Who we are and what we do
2 Our business model
3 Our strategy
4 The story of our year
5 Chair’s statement
7 ChiefExecutiveOfficer’sreview
10 Our key performance indicators
Review of the year
13 Financialreview
20 Divisionalperformancereviews
26 Sustainability in focus
34 Innovation in focus
36 People in focus
41 Our Vision 2030 progress
44 Managing risk
49 Principal risks and uncertainties
Non-financial and other disclosures
58 Climate Action report
62 Viabilitystatementands.172disclosure
63 Non-financialandsustainability
informationstatement
Financial statements
Group financial statements
121 Independent auditors’ report
128 Consolidatedincomestatement
129 Consolidatedstatementofcomprehensiveincome
130 Consolidatedstatementofchangesinequity
131 Consolidated balance sheet
133 Consolidatedcashflowstatement
134 Reconciliationofnetcashflowfromoperating
activitiestomovementinnetdebt
135 Notestotheconsolidatedfinancialstatements
Company financial statements
180 Companystatementoffinancialposition
182 Companystatementofchangesinequity
183 NotestotheCompanyfinancialstatements
Other information
191 Environmental performance summary
195 GlobalReportingInitiative(GRI)contentindex
198 Glossary of terms
200 Historicalfinancialsummary
201 Advisers
Governance report
65 The Chair’s introduction
65 The Board’s year
69 The Board at a glance
70 Our Board of Directors
74 Our Executive Committee
75 Ourgovernanceframework
76 HowtheBoardengages(s.172compliance)
82 CompliancewiththeCode
87 Audit Committee report
95 Nomination Committee report
98 Directors’ remuneration report
117 Other regulatory disclosures
119 Statement of Directors’ responsibilities
Innovating
Improving Delivering
Building
Strengthening
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Synthomer plc Annual Report 2024
Whoweare
Our business is built around three divisions, serving
customers in attractive end markets where demand
isdriven by global megatrendsincluding urbanisation,
demographic change, climate change and
sustainability, and shifting economic power.
Coatings & Construction Solutions
Our specialist polymers enhance the sustainability
andperformanceofawiderangeofcoatingsand
constructionproducts.Weservecustomersin
applications including architectural and masonry
coatings,mortarmodification,waterproofing
andflooring,fibrebonding,andenergysolutions.
Adhesive Solutions
Our products help our customers bond, modify and
compatibilisesurfacesandcomponentsforapplications
including tapes and labels, packaging, hygiene, tyres
andplasticmodification,improvingpermeability,
strength,elasticity,damping,dispersionandgrip.
Health & Protection and Performance Materials
Weareaworld-leadingsupplierofwater-based
polymersformedicalgloves,andamajorEuropean
manufacturerofhigh-performancebinders,foams
andotherproductsservingcustomersinarangeof
endmarkets.
About this report
Throughoutthisreportyouwillfindlinkstoourwebsite.
IfyouarereadingthePDFversionofthereport,
theselinkswillbelive.Ifreadingtheprintedreport,
pleasegotoSynthomer.com and search for the
appropriateinformation.
6,000+
Customers
4,000+
People
31
Manufacturing sites
20+
Countries
5
Innovation centres
of excellence
59% of our revenue is from speciality
products, up from 55% in 2023
Synthomer plc Annual Report 20241
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Whoweareandwhatwedo
Our business model
1 EBITDAiscalculatedasoperatingprofitbeforedepreciation,amortisationandSpecialItems.
2 GHGemissionsdefinitionasGHGProtocolCorporateAccountingandReportingStandard.
Weareabusiness-to-businessspecialitychemicalsproducer.Wecreatevalueforallourstakeholders
byapplyingourexpertiseandinnovationcapabilitiestoprovidehigh-performancewater-based
polymersandingredientstoawiderangeofblue-chipcustomersinmultipleattractiveendmarkets.
Key strengths
andresources
Our business
Value creation
forstakeholders
2020-2024
Talented people
4,000+ entrepreneurial, highly skilled
employeeswiththeexpertiseand
experiencetodriveoursuccess
Our global footprint
31 manufacturing sites across North
America,EMEAandAsia,includingfive
innovationcentresofexcellence
Agile supply chain
Oursupplychaincombinesflexibility,
agilityandresiliencethroughitsmixof
long-term supply relationships and
market-based sourcing of 25+ strategic,
andhundredsofsecondary,rawmaterials
Innovation and product development
Hundreds of Synthomer technical service
partners focused on understanding
customers’ individual product needs
andadvisingthemonformulations
Cash-generative businessmodel
Withscopetoflexcapitalallocation
throughthecycle,withinrisk
managementlimits
Creating products
andsolutionsfor6,000+
long-standing customers
inmultipleattractive
endmarkets...
...with
global exposure
toGDP+growth
megatrends...
...through
three end-customer
focuseddivisions...
EBITDA
1
£1.3bn
Free Cash Flow
£490m
Wages and salaries
£1.2bn
R&D spend
£155m
Supplier spend
£8.0bn
Corporation tax paid
£190m
Dividends and capital
returned to shareholders
£185m
Decrease in Scope 1 and 2
GHG
2
emissions pertonne
ofproduction
22%
Coatings
Construction
Health and protection
Tapes, labels and packaging
EV tyres
Energy
Consumer/hygiene
Accelerating urbanisation
Demographic and
socialchange
Climate change and
sustainability
Shifting economic power
Coatings & Construction
Solutions
Adhesive Solutions
Health & Protection
and Performance Materials
...withinnovationdrivingnewproductdevelopmentinclosecollaborationwith
customers,withafocusonsustainability throughout our value chain
Supported by a small corporate centre focused on
Business excellence (SynEx) – Risk management – Capital allocation – Portfolio management
Synthomer plc Annual Report 20242
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Whoweareandwhatwedo
Our strategy
Since 2022, Synthomer has been delivering on our transformational strategy to become a more focused,
strongerspecialitychemicalsbusinessandfulfilour purpose: creating innovative and sustainable solutions
for the benefit of customers and society.
The five pillars of our strategy... ... are each underpinned by three critical principles... ... in pursuit of our long-term ambition.
Organic growth in attractive
end markets
Rigorous and consistent portfolio
management to build focused,
leadingpositions
Operational and commercial
excellencein how we run our business
Differentiated steering in how
weallocate capital and talent
Diversity, equity and inclusion
andholistic people development
End-market
orientation
ineverything we do
See page 20-25
Sustainability
as a value driver and a
principlefor how we run
ourbusiness
See page 26
Innovation
as a critical enabler
See page 34
Aspecialitychemicalscompanyfocused
onselectedattractiveendmarkets
Increasing our specialisation, global reach and simplicity
Greater speciality weighting (by revenue)
Speciality % Base %
50 50
In 2022
55 45
In 2024
70 30
Future
More balanced geographic distribution (by revenue)
USA/Asia % EMEA %
45 55
In 2022
50 50
In 2024
60 40
Future
Less complexity
Manufacturing sites
43
In 2022
31
In 2024
<30
Future
Synthomer plc Annual Report 20243
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Whoweareandwhatwedo
By focusing on delivering our
strategy throughout the
business...
£26m in cost savings and
other self-help delivered in year
Site footprint reduced by five through
divestments and site rationalisations
Compounds divestment completed,
withthree further processes progressing
Zero-capital partnership for US gloves
market; China Innovation Centre opened
€350m bond refinanced;
next major maturity in 2027
Increasing customer centricity and
employee engagement scores
... we made robust financial
progress
1
during the year
despite mixed end-market
demand trends...
£1,986.8m revenue
+5.1%inconstantcurrency
£146.6m EBITDA
+9.2%inconstantcurrency
7.4% EBITDA margin
vs7.1%in2023
£50.4m underlying operating profit
+54.5%inconstantcurrency
£7.2m Total Group underlying loss before tax
vs£31.1mlossin2023
Total Group underlying EPS (2.5)p
vs(35.1)pin2023
... and continued transforming
Synthomer’s ability to create
sustainable value to meet the
needsofthe future.
55% of revenues now from
specialitybusinesses
More than 50% of revenues
in the USA and Asia
24% of volume from new and protected
products (NPP), up from 22% in 2023
7% reduction in absolute Scope 1 and 2
GHGemissions vs 2023
69% of new products with sustainability
benefits
2
, up from 64% in 2023
The story of our year
1 ContinuingGroupunlessotherwisestated.
2 AsdefinedbySynthomer’sProductSustainabilityScorecard.
Synthomer plc Annual Report 20244
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Whoweareandwhatwedo
Chair’s statement
After a year of decisive action that has strengthened the business
and embedded our strategy for value creation, we are able to look
ahead at the opportunities we see for a simplified, more focused
Synthomer, with an increasingly specialised product portfolio
serving attractive end markets.
Focusing on strategic delivery
Iwouldliketogreetstakeholdersinthis,myfirstAnnualReportsince
myappointmentasChairinJanuary2025,afterjoiningtheBoardin
September2024.ItisaprivilegetoleadtheSynthomerBoardatsuch
animportantstageoftheCompany’sevolution.
Throughout my induction into the role, I have been very impressed by the
focusanddeterminationshownbyeveryoneatSynthomerindelivering
itstransformationalstrategytobecomeaspecialitysolutionsplatform,
servingourendcustomers,anddrivingforwardthecompany’sinnovation
andsustainabilityagendas.Itisclearthattheorganisationisbecominga
much stronger platform for driving returns and value creation through these
actions: making our business less complex, leaning into our strengths
andopportunities,pursuingcommercialandoperationalexcellence,
anddisciplinedcapitalallocation.TheleadershipteamandBoardshare
adedicationtofosteringaculturethatsupportsgreaterspeedandagility
inexecutionofourstrategicchoices–asourCEOMichaelWillome
describes on page 7.
Synthomer’s focus on ‘controlling the controllables’ is delivering better
resultsnow,despitetheprolongeddownturninthechemicalssector,with
robustEBITDAgrowth,recoveringvolumes,andstrongergrossmargins.
Wenonethelesscontinuetofacesignificantchallengesfromtheweakness
inend-marketconditions.
Reducingleveragetowardsour1to2xmedium-termnetdebt:EBITDA
targetrangeremainsakeypriority.Wewillcontinuetomonitorandaddress
thisin2025,whilerecognisingthatuntildemandinourendmarketsbegins
torecover,ourabilitytogeneratesignificantFreeCashFlowisquitelimited.
TheBoardsupportstheongoingworktorationaliseourportfolioaspartof
thisprocess,butthiswillonlyhappenatfairprices.
“2024hasbeenayearofinflectionfor
Synthomer.TheCompanyhasmadefurther
good progress despite the continuing
softness in global chemicals markets
andlaidthefoundationsforasuccessful
future.Ilookforwardtoworkingwiththe
Board and our management team to
buildonthosefoundations.”
Peter Hill, CBE
Chair
Synthomer plc Annual Report 20245
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Whoweareandwhatwedo / Chair’sstatementcontinued
IamconfidentthatSynthomerhasthestrategy,people,marketpositions
andfinancialstrengthtoflourishandoutperformcompetitorsasthisperiod
ofexceptionalchallengesinourindustrybeginstoease.Iampersonally
convincedthatthebusinesswillcreatesubstantialvalueforshareholders
andotherstakeholdersintheyearsahead.
Engaging with our stakeholders
Thereisnobetterwaytounderstandabusinessthantomeetthepeople
whoareclosesttoitscustomersandwhoformulateandproduceour
products–soithasbeenapleasuretomeetthoseteamsduringmysite
visits in the UK, USA, China, Malaysia, Germany and the Netherlands, and I
lookforwardtomeetingmanymore.Iwasconsistentlyimpressedbyour
people’s enthusiasm to see Synthomer succeed and their commitment to
deliveringforourcustomers.OnbehalfoftheBoardIwouldliketothank
themfortheirhardworkanddedication.
IhavealsometseniorleadersofKualaLumpurKepongBerhad(KLK)–our
strategicshareholder.TheconfidenceshownbyKLKandothershareholders
inSynthomer’smanagementteamanditsspecialitystrategy–aswellas
theirfinancialsupportduringthe2023rightsissueandbefore–hasbeen
crucial.Iknowthewholebusinessisgratefulforshareholders’ongoing
commitmentandconstructivefeedback.Ilookforwardtomeetingand
engagingwithmoreofourkeystakeholdersinthefuture.
Harnessing the Board’s skills, and looking to the future
The Board has continued to oversee strategy and monitor performance,
providingchallengeandsupporttoMichaelandhisteam.
OurworkisdescribedinTheBoard’syear,page65,buthereIwouldlike
tohighlighthowSynthomer’seffortsareincreasinglyfocusingonforward-
lookingactivities.OneexampleisournewInnovationTaskforce,bringing
together Board members, senior leaders and other experts from around
theGroup,asdescribedonpages35 and 67.TheBoardprogrammethis
yearalsoincludedtwodeep-divesessionsongeopoliticalandindustry
megatrends.ThesegavetheBoardfurtherconfidenceinthestrategic
directionoftheCompanywhileunderliningtheimportanceofmakingthe
business as nimble and adaptable as possible in an increasingly complex
globalandmarketenvironment.
Overseeing progress on ESG issues
The Board oversees strategy and delivery on environmental, social and
governance(ESG)ascommercialconsiderationsforourcustomersaswell
asinrelationtoregulatoryandcorporateresponsibilityagendas.ESGis
treatedasamatterreservedforthewholeBoard,reflectingitsimportance
toourstrategy.HealthandsafetyisacoreSynthomervalueandisalways
consideredasthefirstitemateveryBoarddiscussion.Ourperformancein
these areas is described on page 41.
IhavebeenparticularlystruckbytheworkbeingdonetomakeSynthomer
amorediverse,inclusivebusiness.Thisisoneofthefivepillarsofour
strategy,reflectingtheimportanceSynthomerplacesonunderstanding
asbroadarangeofend-customerviewpointsandinterestsaspossible.
Wehavemoretodo,butwehaveseenencouragingprogressongender
diversityinparticularoverthepastfewyears,asdescribedonpage37.
The Board
There have been several changes to the Board announced since the
lastAnnualReport,withfurtherevolutiontofollowasweaimtoensure
theBoardremainswell-placedtosupportSynthomer’scontinued
transformation.AsdescribedmorefullyintheNominationCommittee
report on page 95,theCompanywelcomesUweHalder,andisverygrateful
fortheserviceoftheHon.AlexanderCattoandIanTyler,bothofwhomare
steppingdownduring2025.
IwouldliketoconcludebyexpressingmythankstoCarolineJohnstone,
whosteppeddownasChairoftheBoardon1January2025afternine
yearswithSynthomer.IknowtheBoardandthebusinessasawholeare
verygratefulforhercontributionanddedicationoverthattime–andona
personal note, I thank her for sharing her invaluable experience and insights
duringourcomprehensivehandover.
Peter Hill, CBE
Chair
11 March 2025
Synthomer plc Annual Report 20246
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Whoweareandwhatwedo
ChiefExecutiveOfficer’sreview
We made robust financial progress in the year and took important
steps in our strategy of focusing on our most differentiated,
speciality products, despite the lack ofany meaningful recovery
insome of our end markets.
Robust results that show the benefits of specialisation
We continued to focus in 2024 on delivering our multi-year self-help
programmes,whilefurtherstrategicallyrepositioningSynthomertoachieve
ourmedium-termgrowth,marginandreturnsambitions.Ourdirectionremains
clear: further specialisation is at the heart of our strategy, because speciality
productswithdifferentiatedbenefitsforenduserswillbethegreatestdrivers
ofimprovedreturnsforourbusinessinthemediumtolongterm.
The chemicals sector remains in a prolonged period of suppressed
demand,whilegeopoliticalvolatilityishavingeconomicandstructural
effectsonglobalmarketsandinmanypartsofourindustry.Weneed
tobealerttotherisksandopportunitiesthatthisenvironmentpresents,
and continue to make our business even more agile and adaptable so that
wecananticipateandrespondtotheneedsofourhigh-qualitycustomers
intheirattractiveendmarkets.Thisyearwemadefurtherprogressin
focusing,simplifyingandstrengtheningSynthomerwhiledelivering
improvedvolumes,revenues,marginsandunderlyingearnings.
Profit growth and higher margins
Our2024revenueof£1,986.8m(2023:£1,940.6m)andEBITDAof£146.6m
forthecontinuingGroup(2023:£137.4m)wereinlinewithexpectations.
Theyreflectvolumegrowthandastronggrossmarginperformance
underpinnedbysignificantprogressonourmulti-yearcost-savingand
reliabilityimprovementprogrammes,aswellastheongoingstrategic
re-allocationofourcapitalandotherresourcestowardsthehighermargin,
moreresilientspecialitysolutionswithinourportfolio.Aswehaveflagged
sincethestartof2024,theseactionswerepartiallyoffsetbysome
increasesinoperatingcosts,mainlyduetowageinflationand
normalisationofbonusaccrual.Nonetheless,underlyingoperatingprofit
increasedby54.5%inconstantcurrencyto£50.4m(2023:£33.4m).
“ Our direction remains clear:
furtherspecialisationisattheheart
ofourstrategy,becausespeciality
productswithdifferentiatedbenefits
forend-userswillbethegreatest
drivers of improved returns for our
businessinthemediumtolongterm.
We believe that our plans to achieve
this strategic transformation are
buildingmomentum.”
Michael Willome
ChiefExecutiveOfficer
Synthomer plc Annual Report 20247
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Whoweareandwhatwedo / ChiefExecutiveOfficer’sreviewcontinued
Thestrongestdivisionalprogressin2024wasachievedbythe
Adhesive Solutions (AS) division,whichdeliveredastepchange
infinancialresultsthisyearthroughoursuccessfulperformance
improvementprogramme,withimprovedreliabilityallowingsome
previouslylostmarketsharetoberegainedandgreatercostefficiency.
Theprogrammeaddedafurther£21minbenefitsintheyear,andthe
scope and scale of further savings to be achieved in 2025 and 2026
continuetoincrease.Justasimportantly,giventhisstrongprogress,
theASteamarenowincreasinglyabletoshifttheirfocustowardsthe
division’sconsiderableglobalgrowthopportunitiesin2025andbeyond.
The Health & Protection and Performance Materials (HPPM) division
alsomadesignificantEBITDAprogress,principallyduetoasubstantial
increase in activity levels in the nitrile latex for gloves market, albeit at unit
marginsthatremainwellbelowpre-pandemiclevels.Wewerealsovery
pleasedtobeginasignificantzero-capitalpartnershipfortheUSdomestic
medicalglovesmarket.Thismarketisevolvingrapidly,inpartduetoUS
government procurement policies under both the current and previous
USfederaladministrations,whicharedesignedtosupportthegrowthin
onshoremanufacturingofpersonalprotectiveequipment.InQ32024we
receivedtheinitialtechnologylicensingfeepaymentasthefirststageof
amulti-yearpartnershipleveragingourHealth&Protectionintellectual
property,technologyandmanufacturingexpertise.
Mixedmarketconditions,withnotablypoorlevelsofconstructionactivity,
and a substantial share of higher operating costs limited the scope for our
Coatings & Construction Solutions (CCS) divisiontooutperformin2024.
However,ourmostspeciality-focuseddivisioncontinuedtoenhanceits
alignmentofpeople,capitalandstrategytosupportlong-termprofitable
growthinitsmarkets,includingbyinvestingintheinnovationpipelineand
tosupportfurthergeographicgrowth.
Year-endnetdebtwas£597.0m(2023:£499.7m),principallyreflectinga
reductioninourutilisationofreceivablesfinancingfacilities,theECfine
settlement, and the remainder of the previously agreed deferred
contributionstotheUKpensionschemeintheperiod.
Further progress on our specialisation strategy
Getting closer to our customers and serving their needs for specialised,
highvalue-addedproductsiscentraltoourfuturesuccess.
In2024,specialityproductsrepresented55%ofrevenues,and60%ofAS
revenues,withtheshareexpectedtoincreasein2025.Wehavealsocontinued
tobuildourpositionsintheUSAandAsia,whichnowcontributemorethan
halfofrevenues.Andwhilewecontinuetooperatewiththevastmajorityof
ourproductionactivityin-regiontobeclosetoourcustomers,wehavecarried
onourworkofsimplifyingourbusinessandfocusingonspecialisationthrough
divestmentsorclosures.Wehavestreamlinedourfootprintfrom43sitesin
Q42022to31atthestartof2025.ThisincludesthedivestmentinApril2024
ofournon-corelatexcompoundingbusiness,whichcomprisedtwo
manufacturingsitesintheNetherlandsandoneinEgypt.Wecontinueto
progressthreefurthernon-coredivestmentprocesses.Wealsocontinueto
monitor potential opportunities in strategically attractive end markets for the
future,whenourfinancialcircumstancesallow.
Weremainfocusedonruthlesslydisciplinedcapitalallocation.Puttingtime
and resources behind the parts of the business that have the greatest
returnspotentialisespeciallyimportantwhendemandissuppressed.
Innovation and sustainability – adding value for customers
We see innovation and sustainability as integral enablers for our strategy,
important differentiators for our customers, and key to value creation in the
longterm.Ourcustomers’sustainabilityambitionsdemandinnovativeproducts
withdemonstrablesustainabilitybenefits–anareaofgrowingstrengthforus.
Driving the pace of innovation
Customer-centric innovation gives us clear competitive advantage, and this
yearwesustainedourconsistentrecordofensuringthatnewandprotected
products(NPP)makeupatleast20%ofoursalesvolumeoverthelongterm.
Weknowthatspeedmattersifwearetostayaheadininnovation,andthis
year the Board established our Innovation Taskforce to help drive the pace
ofchange.ThisisanareawheredigitalisationandtheuseofAIwillbe
increasinglyimportant–andalreadythisyearwehaveusedadvanced
dataanalyticstohelpidentifytheprecisecompositionsweneedtocreate
newpolymersforemulsionsinCCS.Wehavealsouseddigitalanalytics
toolstooptimisemanufacturingefficiency,forexampleinathroughput
optimisationprojectatourLeHavresite(seepage33).Atthesametime,
Synthomer plc Annual Report 20248
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Whoweareandwhatwedo / ChiefExecutiveOfficer’sreviewcontinued
wehavestrengthenedourabilitytomeettheacceleratingneedforinnovative
andsustainableproductsnowthatourstate-of-the-artlaboratoriesare
operationalatournewChinaInnovationCentreinShanghai.
The responsiveness of our technical teams played an important role in
anoverallnine-pointimprovementto46inourannualNetPromoterScore
(NPS)surveyofourcustomerscompletedinMarch2024.Detailedsurvey
data by business line is being used by our teams to further improve our
productofferingandenhancetheexperienceofourcustomersglobally.
Making progress on our sustainability objectives
Innovation and sustainability often go hand in hand for us, given customers’
demand for products that help them meet their targets and ambitions, and
theexpectationsofconsumersandregulators.Wecontinuetobuildour
innovationpipelinetosupportsustainableproductdevelopment,with38new
productslaunchedthisyearwithdefinedsustainabilitybenefits(seepage34).
Atthesametime,wehavemadeprogressacrossthetargetssetoutinour
sustainability roadmap, including the near-term greenhouse gas (GHG)
emissionsreductiontargetsthatwereapprovedbytheScienceBasedTargets
initiative(SBTi)lastyear.WeachievedISCCPLUScertificationateightofour
key sites in 2024, enabling us to offer a mass balance approach for bio-based
andcircularrawmaterialsaspartofourroleatthecentreofourvaluechains.
Celebrating our people as part of our entrepreneurial culture
Our people’s commitment to delivering for customers has played a key
roleinourstrategicprogressin2024.Acrossthebusiness,weare
strengtheningourculturesothatweremaintruetoourvalueswhile
focusingevenmoresharplyonprofitablegrowth–andontheagile,
entrepreneurialspiritthatwilldriveit.
I am very encouraged by the increased engagement score and higher
participationrateof80%forourrecentYourVoiceemployeesurvey,
comparedwiththelastoneconductedin2021.Giventhedifficult
environmentofthepastfewyears,ourengagementscoreof7.0isagood
platformforustobuildon.Wehavefurtherinvestedinourpeopleandour
talentpipelinethisyear,withexpandedgraduateandgloballeadership
programmes (see page 39).ThistiesintoourGroup-widefocuson
excellence–ourSynExprogrammefocusesonbothmanufacturingand
commercialexcellence,withastrongemphasisonimprovingourpeople’s
skills and ensuring they can understand and deliver on customer needs as
wellasonimprovingourprocesses.
Ourworkondiversity,equityandinclusionisalsomovingforward.We
continuetofocusongenderdiversityinparticular.Whilein2024womenheld
29%ofseniormanagementroles,upfrom15%in2020,thereisclearlystillmore
todothroughouttheorganisation,andourworkinthisareawillcontinue.
Staying focused on process safety
Health and safety is one of our core values and an indispensable part of
ourculture.Forthesecondyearinarow,weachievedanhistoriclowinour
recordableinjurycaserateof0.14.Weareinthetopquartileforourindustry,
agreatachievementfromallourteamsandareflectionofthefactthatthe
Synthomersafetymindsetisbeingembracedbysitesthathavejoinedthe
portfoliothroughtheacquisitionsofrecentyears.Worktoimproveour
safetycultureneverstops,however.Thisyearwecontinuedourfocuson
processsafety,whichshowsconsiderablevariationbetweendivisionsand
reflectsthemixofchemistriesandfacilitieswenowhaveinourportfolio.
Wecontinuetohaveworktodoatourmostrecentlyacquiredsitesto
acceleratetheirimprovementandwewillcontinuetheseeffortsin2025.
Outlook
Tradingsincethestartof2025hasbeeninlinewithourexpectations,which
assumedamutedstarttotheyearcomparedwiththerelativelystrongfirst
quarterintheprioryear.
Weexpecttodeliverfurtherearningsprogressin2025,drivenby£25-30min
expectedbenefitsfromdeliveringourself-helpandstrategicplans,withless
offsettingcostheadwindsexpectedthanin2024.Weareassuminglimited
end-marketdemandimprovementatthisstage.Ourconfidenceis
underpinned by the strong 2024 exit margins in our speciality businesses,
reflectingprogressmadeonourcostprogrammesandfromreallocatingour
resourcestowardsourspecialityproducts,coupledwiththeongoing
volumeimprovementinHealth&Protection.
WealsoexpecttodeliverpositiveFreeCashFlowin2025andsome
deleveraging,evenwithoutasignificantimprovementinmarketconditions.
Inthemediumterm,weremaincommittedtoourambitiontomorethandouble
Synthomer’s earnings, through a combination of continued reliability and
costactions,end-marketvolumerecoveryandstrategicdelivery.
Michael Willome
ChiefExecutiveOfficer
11 March 2025
Synthomer plc Annual Report 20249
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Whoweareandwhatwedo
Our key performance
indicators
(
KPIs
)
Measuring the delivery ofour strategy
We measure our progress in delivering our strategy
againstarangeoffinancialandnon-financialKPIs,
whichwekeepunderreview.Allfinancialperformance
KPIsareshownfortheTotalGroupasoperatedinthe
year,whilethenon-financialKPIsreflectthecontinuing
Group.Wealsosetoutourperformanceagainstallour
Vision 2030 sustainability targets on pages 41 to 43.
Financial (Total Group)
Revenue
2024 £1,996.6m
2023 £2,021.2m
2022 £2,585.1m
2021 £2,329.5m
2020 £1,644.2m
2019 £1,459.1m
Strategy
Definition
Revenueisrecognisedatthepointwhencontrolofourproducts
istransferredtocustomers.
Comment
TotalGrouprevenuedecreasedto£1,996.6,reflectingnon-core
divestments.RevenueforthecontinuingGroupincreasedby5.1%in
constantcurrency,reflectingan8.4%increaseinvolumedrivenbya
recovery of some of the substantial volume declines experienced in
2023,partiallyoffsetbypass-throughoflowerrawmaterialinput
pricesrelativetotheprioryear.
EBITDA
2024 £149.2m
2023 £139.1m
2022 £265.1m
2021 £522.2m
2020 £259.4m
2019 £17 7.9m
Strategy
Definition
Operatingprofitbeforedepreciation,amortisationand
SpecialItems.
Comment
EBITDAforthecontinuingGroupincreasedby9.2%inconstant
currency,principallybenefitingfromourself-helpactionsand
strategic reorientation, partially offset by the previously disclosed
operatingcostincreases.TotalGroupEBITDAalsoincreased
comparedtoprioryear.
EBITDA %
2024 7.5%
2023 6.8%
2022 10.3%
2021 22.4%
2020 15.8%
2019 12.2%
Strategy
Definition
EBITDAasapercentageofrevenue.
Comment
EBITDA margin increased due to the self-help actions and strategic
progressnotedabove.
Underlying EPS
2024 (2.5)p
2023 (35.1)p
2022 152.0p
2021 554.0p
2020 212.9p
2019 186.4p
Strategy
Definition
BasicunderlyingearningspersharebeforeSpecialItems.
Comment
Underlyingearningspersharesignificantlyimprovedfromtheprior
year,principallyreflectingthehigherEBITDA,lowerdepreciation
andamortisationandfinancecosts.
Link to strategy
Organicgrowthinattractiveendmarkets
Rigorousandconsistentportfoliomanagementto
buildfocused,leadingpositions
Operationalandcommercialexcellenceinhowwerun
ourbusiness
Differentiatedsteeringinhowweallocatecapitalandtalent
Diversity,equityandinclusion,andholisticpeople
development
Synthomer plc Annual Report 202410
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Whoweareandwhatwedo / OurKPIscontinued
Financial KPIs continued
Non-financial
Free Cash Flow
2024 £(54.7)m
2023 £85.7m
2022 £69.2m
2021 £217.6m
2020 £167.6m
2019 £92.8m
Strategy
Definition
Movementinnetdebtbeforefinancingactivities,foreign
exchangeandthecashimpactofSpecialItems,assetdisposals
andbusinesscombinations.
Comment
FreeCashFlowwas£(54.7)m,althoughmuchclosertoneutral
whenadjustedforthemovementinreceivablesfinancingand
deferredpensioncontributions.
% New and protected products (NPP)
2024 24%
2023 22%
2022 20%
2021 24%
2020 22%
2019 22%
Strategy
Definition
Percentage of sales volume in the year that can be attributed
topatentedproductsandproductslaunchedinthepastfiveyears.
Comment
TheincreaseinNPPreflectsourcontinuingfocusoninnovationto
enhanceourproductpipelineandexceedsourtargetof20%.
Recordable injury case rate (RCR)
2024 0.14
2023 0.16
2022 0.34
2021 0.31
2020 0.36
2019 0.20
Strategy
Definition
Recordableinjurycaserateforaccidentsinvolvingmorethan
first-aidtreatment,expressedasaccidentsper100,000hours
workedbyemployeesandallcontractors.
Comment
WeachievedanotherhistoriclowinourRCRrate.Thisisagreat
achievement,onethatrequirescontinualfocusanddiligencefrom
allourteams.
ROIC
2024 1.5%
2023 1.6%
2022 7.6%
2021 26.1%
2020 13.2%
2019 13.0%
Strategy
Definition
Underlyingoperatingprofitaftertaxdividedbyaverageinvested
capitalatstartandendofyear(comprisingequity,netdebt,
post-retirementbenefitobligationsandleaseliabilities).
Comment
2024underlyingoperatingprofitincreasedby50.9%comparedwith
2023andinvestedcapitalwasbroadlyflat;thiswasoffsetbya
substantiallyhighereffectivetaxratein2024.AttheGroup’s
medium-termeffectivetaxrateexpectationof25%,2024ROIC
wouldhaveincreasedto2.0%.
Scope 1 and 2 GHG emissions (kt CO
2
e)
2024 305
2023 329
2022 377
2021 310
2020 403
2019 587
Strategy
Definition
Scope1–directGHGemissionsfromtheactivitiesof
Synthomerorunderitscontrol.
Scope2–indirectGHGemissionsfromthegeneration
ofpurchasedenergyconsumedbySynthomer.
Comment
OurScope1and2emissionsreducedthisyearby7.2%,anoverall
reductionof44.9%comparedtoour2019baseline.Thisreduction
wasprimarilydrivenbyalower-carbonsupplyofsteamtoour
siteinMarl,Germanyandacontinuedfocusonenergyand
processefficiency.
Gender diversity in senior management
Female Male
2024
29.2%
2023
30.4%
Strategy
Definition
Proportion of females in the senior management population
(membersoftheexecutiveteamandtheirdirectreports).
Comment
Despitetheslightdeclineversus2023,weremainconfidentof
reachingournear-termobjectiveofhavingwomenrepresent33%
ofseniormanagersbytheendof2025.
Synthomer plc Annual Report 202411
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Innovating
24% of volumes from new and protected products (NPP)
in 2024, up from 22% in 2023.
Reviewoftheyear
13 Financialreview
20 Divisionalperformancereviews
26 Sustainability in focus
34 Innovation in focus
36 People in focus
41 Our Vision 2030 progress
44 Managing risk
49 Principal risks and uncertainties
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Synthomer plc Annual Report 202412
Reviewoftheyear
Financialreview:ChiefFinancialOfficer’sintroduction
A year of steady delivery on our strategy has strengthened the
business for the future and returned robust underlying earnings
improvement in 2024, even as we continue to remain highly
focused on cost, capital discipline and debt management while
demand remains subdued.
Controlling the controllables and delivering on strategy
Whileweareconfidentthatglobalmegatrendswillreturnoursector
togrowth,2024hascontinuedtherecenttrendofsubdueddemandin
manyendmarkets.Wehaveusedthistimetofocusontwomainpriorities:
ensuringthatthebusinessisrunaseffectivelyandefficientlyaspossible
inthepresent,whilecontinuingtoreshapeSynthomerasaspeciality
solutionsplatformforattractiveendmarketsinthemediumterm.Wehave
madegoodprogressinbothareas,andweendtheyearastrongerbusiness
thanwebeganit.
Improving cost competitiveness and reliability
Work across the business continued to focus on further improving cost
competitivenessandreliability.Thisincludedstrengtheningoursupplier
networkforkeyrawmaterials,andimprovingourend-to-endplanning,
procurementandlogisticsprocesses.Overall,ourperformance
improvementprogrammedeliveredc.£26minbenefitsin2024.Asour
procurement optimisation programme ramps up in 2025 and other cost
andstrategicinitiativesareimplemented,alongsideloweroffsettingbonus
accrualandwageinflation,weareconfidentinmakingfurtherearnings
progressin2025.
“ We end the year a stronger
businessthanwebeganit,despite
subdueddemand,andwewill
continue to use all available means
todrivepositiveFreeCashFlow
andreduceleveragein2025.”
Lily Liu
ChiefFinancialOfficer
Synthomer plc Annual Report 202413
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear / Financialreview:ChiefFinancialOfficer’sintroductioncontinued
Strategic progress and rigorous capital allocation
Portfolio management and differentiated capital allocation are
importantpillarsofourstrategy.
InApril2024,wecompletedthedivestmentofournon-coreCompounds
businessforaprofitondisposalof£1.1mbeforetherecyclingoftranslation
reservesandcashproceedsof£19.6maftercosts.Thedivestmentincluded
three manufacturing sites, further reducing our site footprint to 31, a reduction
ofnearly30%since2022.
Our divestments and rationalisations all serve the central aim of our
strategy–tomakeSynthomeramorefocusedspecialitybusiness.
Theyalsosupportourdisciplinedapproachtocapitalallocation,prioritising
resourcestothehighest-returningprojectsingrowthmarketsandgiving
preferencetospecialityratherthanbasebusinesses.Amorestreamlined
portfoliowithfewersitesmeansourcapital,peopleandtimecanbe
directedmoreeffectivelytoourhighest-returningopportunities.In2024
wespent£83.2minnetcapitalexpenditure,comparableto2023,butwith
fewersitesagreaterproportionofthathasbeenallocatedtoenhancing
speciality product capacity in attractive geographies, rather than to
importantbutlow-returningSHEandmaintenanceactivities.Examples
include our de-bottlenecking investment in coatings capacity in the Middle
East (see page 20), and the full opening of our China Innovation Centre in
Shanghai (see page 33).
Staying focused on net debt
Weendedtheyearwithnetdebtof£597.0mcomparedto£499.7matthe
endof2023,reflectinga£23.2mreductioninourutilisationofreceivables
financingfacilities(to£87.3mat31December2024),pensionpayments
of£19.8mincludingtheremainderofthepreviouslyagreeddeferred
contributionstotheUKpensionscheme,aswellaspaymentinH1ofthe
£39.1mECfineimposedin2022bytheEuropeanCommissioninrelation
toStyreneMonomerpurchasing.FreeCashFlowwas£(54.7)m,although
muchclosertoneutralwhenadjustedforthemovementinreceivables
financinganddeferredpensioncontributions,butclearlylowerthanthe
veryhighlevelofEBITDAtoFreeCashFlowconversionin2023.
Atyear-end,netdebt:EBITDAunderthecovenantleveragedefinitionwas
4.6x,wellwithinour5.75xcovenantrequirement,althoughsomewayfrom
ourmedium-termtargetofthe1-2xrange.Wecontinuetofocusonall
availableopportunitiestoreduceleverage.Thenon-recurrenceofthe
exceptionaloutflowsin2024,andexpectedreductionsinnetworking
capital,areexpectedtosupportpositiveFreeCashFlowanddeleveraging
in2025,evenifend-marketconditionsdonotsignificantlyimprove.
InApril2024,wesuccessfullytenderedfor€370mofourbondsduein2025,
reducinggrossdebtandextendingmaturitiesbyissuing€350mofbonds
duein2029.Weexpecttopaytheremaining€150moutstandingof3.875%
seniorunsecuredloannotesmaturingJuly2025fromcashandshort-term
deposits.TheGroup’sundrawncommittedliquidityat31December2024
wasinexcessof£470m,comprisingunrestrictedcashandshort-term
depositsof£225.8m,theundrawnRCFandothercommittedfacilities.
Ournextsignificantdebtmaturityisin2027.
Targeting growth in the medium and long term
Weremainfullyfocusedonourmedium-termtargets.Drivenbythegrowth
weexpectasend-marketdemandrecovers,weanticipatemid-single-digit
growthoverthecycleonaconstantcurrencybasis.Weaimtobringour
EBITDAmarginabove15%,drivenbyspecialisation,sustainableinnovation
and greater differentiation, and supported by business excellence and
furthersimplifiedmanufacturingoperationsandsupplychains,inlinewith
ourstrategy.Overtime,ourgoalistodrivereturnoninvestedcapitalinto
themid-teens.
Lily Liu
ChiefFinancialOfficer
11 March 2025
Synthomer plc Annual Report 202414
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear
Financialreview
Group revenue, EBITDA and operating profit – continuing operations
RevenueforthecontinuingGroupof£1,986.8m(2023:£1,940.6m)increasedby5.1%inconstantcurrency.Thisprincipallyreflects
an8.4%increaseinvolumedrivenbyarecoveryofsomeofthesubstantialvolumedeclinesexperiencedin2023,partiallyoffsetby
pass-throughoflowerrawmaterialinputpricesrelativetotheprioryear.
EBITDAforthecontinuingGroupincreasedby9.2%inconstantcurrencyto£146.6m(2023:£137.4m),principallybenefitingfrom
ourself-helpactionsandstrategicreorientationtohighermarginspecialitybusinesses,partiallyoffsetbythepreviouslydisclosed
operatingcostincreases,mainlyduetowageinflationandnormalisationofbonusaccrual.Corporatecostsincreasedto£23.7m
intheperiod(2023:£20.2m),reflectingwageinflation,bonusaccrual,timingofoperatingexpendituresandhigherexpenditurein
relationtoimplementingoursustainabilityobjectives.Depreciationandamortisationwas£96.2m(2023:£104.0m),resultingin
underlyingoperatingprofitforthecontinuingGroupof£50.4m(2023:£33.4m).
Onastatutorybasis,includingtheSpecialItemsexcludedfromunderlyingmeasures(seebelow),thisresultedinanoperatingloss
forthecontinuingGroupof£(24.1)m(2023:£(39.5)m).
Full year ended 31 December 2024, £m CCS AS HPPM Corp
Continuing
operations Discontinued Total Group
Revenue 790.5 588.4 607.9 – 1,986.8 9.8 1,996.6
EBITDA 85.9 47.9 36.5 (23.7) 146.6 2.6 149.2
EBITDA % of revenue 10.9% 8.1% 6.0% 7.4% 7.5%
Operating profit – underlying 60.6 15.0 8.4 (33.6) 50.4 2.4 52.8
Operating profit/(loss) – statutory 32.5 (9.5) (9.5) (37.6) (24.1) (1.8) (25.9)
Full year ended 31 December 2023, £m CCS AS HPPM Corp
Continuing
operations Discontinued Total Group
Revenue 820.2 581.7 538.7 – 1,940.6 80.6 2,021.2
EBITDA 100.1 31.2 26.3 (20.2) 137.4 1.7 139.1
EBITDA % of revenue 12.2% 5.4% 4.9% 7.1% 6.8%
Operating profit/(loss) – underlying 74.3 (7.5) (6.0) (27.4) 33.4 0.4 33.8
Operating profit/(loss) – statutory 42.1 (32.7) (15.3) (33.6) (39.5) 57.2 17.7
Synthomer plc Annual Report 202415
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear / Financialreviewcontinued
Special Items – continuing operations
Thefollowingitemsofincomeandexpensehavebeenreportedas‘SpecialItems–continuingoperations’andhave
been excluded from EBITDA and other underlying metrics:
Full year ended 31 December
2024
£m
2023
£m
Amortisation of acquired intangibles (45.1) (49.3)
Restructuring and site closure costs (including share of JV) (15.4) (14.7)
Impairment charge (5.7) (5.6)
Pension past service cost (4.4) –
Sale of business (3.3) (0.1)
Acquisition costs and related gains (0.6) (2.0)
Regulatory fine – (0.7)
Abortive bond costs – (0.5)
Total impact on operating profit – continuing operations (74.5) (72.9)
Loss on extinguishment of financing facilities (1.4) (4.7)
Fair value movement on unhedged interest rate derivatives – (1.8)
Total impact on loss before taxation – continuing operations (75.9) (79.4)
Taxation Special Items 7.5 (1.7)
Taxation on Special Items 7.1 4.5
Total impact on loss for the period – continuing operations (61.3) (76.6)
Amortisationofacquiredintangiblesreflectsthe
amortisation on the customer lists, patents, trademarks
andtradesecretsthataroseonhistoricacquisitions.
Theintangibleassetsarisingontheacquisitionare
amortisedoveraperiodof8-20years.
Restructuring and site closure costs in 2024 mainly
compriseda£2.4mgaininrelationtositerationalisation
activity and a release of a tax penalty provision in
Malaysia,a£5.5mchargeinrelationtotheongoing
integrationoftheacquiredadhesiveresinsbusiness,
£7.3minrelationtotheongoingfunctionalandsite
rationalisation in the USA and Europe, as a result of
previousdivestmentsandclosures,and£3.7mof
restructuringcostsassociatedwithouroperational
sitereviewstoalignwithourstrategicinitiatives.
In2024,a£3.6mimpairmentchargewasprovidedfor
inrelationtothemothballingofthenitrilelatexplantin
Malaysiaanda£2.1mimpairmentwasrecognisedin
relationtositerationalisationsintheUSA.
Thepensionpastservicecostof£4.4mrelatestoa
one-offnon-cash‘Barberwindow’equalisationand
otheradjustmentswhicharosefollowingalegal
reviewofschemedocumentation.
Saleofbusinessescostsof£3.3min2024mainly
comprise costs incurred in relation to previous and
potentialfuturedivestments.
Acquisitioncostsandrelatedgainsof£0.6min2024
relatetothepensioncostsassociatedwiththe
acquisitionoftheadhesiveresinsbusiness.
TaxationSpecialItemsof£7.5mreflectsthereleaseofa
Malaysianuncertaintaxprovisionwhichwassuccessfully
concludedintheyear.
The Taxation on Special Items for continuing operations
in2024was£7.1m,mainlyrelatingtodeferredtax
arisingontheamortisationofacquiredintangiblesand
restructuringandsiteclosurecosts.
Discontinued operations
On 30 April 2024, the Group completed the divestment
of its latex compounding operations (‘the Compounds
business’) to Matco Latex Services BV, resulting in a net
cashinflowof£19.6m.Theprofitondisposalbeforethe
recyclingoftranslationreserveswas£1.1m.The
Compounds business is reported as a discontinued
operationintheseresults.InaccordancewithIFRS5,
discontinuedrevenueshavebeenreducedby£5.7m,
representing the revenue earned to the date of sale by
the continuing operations from inter-company sales to
theCompoundsbusiness.Continuingrevenueshave
beenincreasedbythesameamount.
Intheperiod,£4.2mofnetlosseswererecognisedin
relationtoSpecialItems–discontinuedoperations
(2023:£39.4mgain),comprisingtheprofitondisposal
of£1.1mnotedaboveand£(4.4)moftranslationlosses
recycledfromreservesonthedisposal,aswellas
£0.2mofgainsrelatedtootherpreviousdisposalsoffset
by£(1.1)mofcostsinrelationtotheclosureoftheNorth
AmericaPaper&Carpetbusiness.
Synthomer plc Annual Report 202416
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear / Financialreviewcontinued
Earnings per share
Earningspershareiscalculatedbasedontheweighted
averagenumberofsharesinissueduringtheyear.The
weightedaveragenumberofsharesfor2024was163.5m
(2023:85.4monacomparablebasis),reflectingthe20to1
shareconsolidationandtheissuanceofnewsharesat
adiscountundertherightsissueinOctober2023.Asat
11March2025,theCompanyhad163.5msharesinissue.
Underlyingearningspershareis(2.5)pencefortheyear,
asignificantimprovementfrom(35.1)pencein2023on
acomparablebasis.
Thestatutoryearningspershareis(44.4)pence(2023:
(78.5)penceonacomparablebasis).
Currency
TheGrouppresentsitsconsolidatedfinancial
statements in sterling and conducts business in many
currencies.Asaresult,itissubjecttoforeigncurrency
riskduetoexchangeratemovements,whichaffectthe
Group’s translation of the results and underlying net
assetsofitsoperations.Tomanagethisrisk,theGroup
usesforeigncurrencyborrowings,forwardcontracts
andcurrencyswapstohedgenon-sterlingnetassets,
whicharepredominantlydenominatedineuros,US
dollarsandMalaysianringgits.
In2024,theGroupexperiencedatranslationheadwind
of£3.3monEBITDA,withaverageFXratesagainstour
threeprincipalcurrenciesof€1.18,$1.28andMYR5.84
tothepound.
Given the global nature of our customer and supplier
base, the impact of transactional foreign exchange can
beverydifferentfromtranslationalforeignexchange.
We are able to partially mitigate the transaction impact
by matching supply and administrative cost currencies
withsalescurrencies.Toreducevolatilitywhichmight
affect the Group’s cash or income statement, the Group
hedges net currency transaction exposures at the point
ofconfirmedorder,usingforwardforeignexchange
contracts.TheGroup’spolicyis,wherepracticable,to
hedgeallexposuresonmonetaryassetsandliabilities.
Finance costs
Full year ended 31 December
2024
£m
2023
£m
Interest payable (68.0) (70.6)
Interest receivable 12.1 10.2
Net interest expense on defined benefit obligation (1.7) (2.7)
Interest element of lease payments (2.4) (1.8)
Finance costs – underlying (60.0) (64.9)
Fair value movement on unhedged interest rate derivatives – (1.8)
Loss on extinguishment of financing facilities (1.4) (4.7)
Finance costs – statutory (61.4) (71.4)
Underlyingfinancecostsdecreasedto£60.0m(2023:
£64.9m)andcompriseinterestontheGroup’sfinancing
facilities,interestrateswaps,amortisationofassociated
debt costs and IAS 19 pension interest costs in respect of
ourdefinedbenefitpensionschemes.Thereductioninnet
interestpayablemainlyreflectsincreasedinterestreceivable
followingreceiptoftheproceedsoftherightsissuein
October2023andresultinglowergrossdebt,partially
offset by increased bond interest as a result of the bond
refinancing(seebelow).
TheGrouprecognisedasSpecialItemsatotalof£1.4m
infinancecostsrelatingtothewrite-offofprevious
issuecostsonextinguishmentoffinancingfacilities,
asaresultofthebondrefinancing.
Taxation
The Group’s underlying tax credit for continuing
operationswas£4.2m(2023:£3.5mcredit),representing
an effective tax rate on the underlying loss before tax of
43.8%(2023:11.1%).Theeffectivetaxrateisdrivenby
thegeographicalmixofprofits.TheGroupiswithinthe
scopeoftheOECDPillarTwomodelruleswhichcame
intoeffectfrom1January2024.Managementhas
performed an assessment of the Group’s potential
exposuretoPillarTwotop-uptaxfor2024andbasedon
that assessment, transitional safe-harbour relief should
applytoalljurisdictionsinwhichtheGroupoperatesand
therefore the Group does not expect an exposure to
PillarTwotop-uptax.TheGroupexpectstheeffective
taxratetotrendtowards25%overtime.
Non-controlling interest
TheGroupcontinuestohold70%ofRevertex(Malaysia)
SdnBhdanditssubsidiaries.Theseentitiesforma
relatively minor part of the Group, so the impact on
underlying performance from non-controlling interests
isnotsignificant.
Synthomer plc Annual Report 202417
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear / Financialreviewcontinued
Underlyingoperatingprofitincreasedto£52.8m
reflectingthetradingperformancedescribedabove.
Thenetworkingcapitaloutflowof£24.9mprincipally
reflectsareductioninreceivablesfinancingutilisationof
£23.2m(seebelow)andtacticalincreasesininventory
atyearend.
In December 2022, the Group put in place non-recourse
receivablesfinancingfacilitiesforamaximum
committedamountof€200m.Factoredreceivables
assignedunderthefacilitiesweresubstantiallylower
thanatthestartandmidpointofthefinancialyear,
amountingto£87.3mnetat31December2024(30June
2024:£128.0mnet,31December2023:£110.6mnet).
Underthefacilities,therisksandrewardsofownership
aretransferredtotheassignees.Thedurationofthe
committedfacilitiesrunsto31January2027.
Depreciationreducedreflectingthecapitalexpenditure
profile,whileamortisationofotherintangiblesincreased
duetothePathwaybusinesstransformationprogramme.
Netcapitalexpenditurewas£83.2m(2023:£84.0m),
principallyforPathwayandrecurringSHEand
sustenanceexpenditure.TheGroupcontinuesto
anticipate broadly similar levels of capital expenditure
toFY2024inFY2025.
Netinterestpaidincreasedto£54.6m(2023:£54.3m)
reflectingincreasedandrephasedbondinterestcosts,
offset by increased interest receipts from cash raised
intheOctober2023rightsissue.
Nettaxpaidwas£18.1m(2023:£9.3mreceived)
reflectingtaxpaymentsonaccountmadeintheyear.
Intheyear,£19.8mincashcontributionsweremadeto
theGroup’spensionsschemes,includingc.£17.4min
previously agreed deferred contributions to the UK
pensionschemewhicharenotexpectedtorecur.
Cash performance
Thefollowingtablesummarisesthemovementinnetdebtandisintheformatusedbymanagement:
Full year ended 31 December
2024
£m
2023
£m
Opening net debt (499.7) (1,024.9)
Underlying operating profit (excluding joint ventures) 51.2 32.4
Movement in working capital (24.9) 80.6
Depreciation of property, plant and equipment 84.3 96.5
Amortisation of other intangible assets 12.1 8.8
Net capital expenditure (83.2) (84.0)
Operating Cash Flow
1
39.5 134.3
Net interest paid (54.6) (54.3)
Tax (paid)/received (18.1) 9.3
Pension funding (19.8) (7.3)
Adjustment for gain on sale of assets (4.3) –
Adjustment for share-based payments charge 1.6 1.8
Dividends received from joint ventures 1.0 1.9
Free Cash Flow (54.7) 85.7
Cash impact of settlement of interest rate derivative contracts – 12.1
Cash impact of restructuring and site closure costs (20.2) (28.0)
Cash impact of acquisition costs (1.7) (1.9)
Payment of EC fine settlement amount (39.1) –
Proceeds on sale of business 20.5 208.2
Purchase of adhesive resins business – (18.4)
Rights issue (costs)/proceeds (4.7) 265.5
Repayment of principal portion of lease liabilities (12.1) (12.4)
Dividends paid (0.5) –
Foreign exchange and other movements 15.2 14.4
Movement in net debt (97.3) 525.2
Closing net debt (597.0) (499.7)
1 OperatingCashFlowisdefinedasTotalGroupEBITDAplus/minusnetworkingcapitalmovementlesscapitalexpenditure.
Synthomer plc Annual Report 202418
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear / Financialreviewcontinued
The cash impact of Special Items including
restructuringandsiteclosurecostsandacquisition
costswasanoutflowof£21.9m.
Proceedsonsaleofbusinessof£20.5mcomprises
£19.6mfromthesaleoftheCompoundsbusinessnoted
above,less£3.3mSaleofbusinesscostsalsopreviously
describedabove,plus£4.2mfinalreceiptofdeferred
consideration from the disposal of the Laminates,
FilmsandCoatedFabricsbusinessinFebruary2023.
Groupdebtisdenominatedineurosanddollars.
Theeuroweakenedrelativetosterlingduringthe
year,leadingtoaforeignexchangegaininnetdebt.
Financing and liquidity
At31December2024,netdebtwas£597.0m
(31December2023:£499.7m).Theincreaseprincipally
reflectssettlementoftheECfineinJanuary,thec.£23m
reductioninutilisationofreceivablesfinancingfacilities,
the remainder of the previously agreed deferred
contributions to the UK pension scheme and the Free
CashFlowmovementsnotedabove,partiallyoffsetby
the divestment proceeds for the Compounds business
InApril2024,wetenderedfor€370mofourbondsdue
2025, reducing gross debt and extending maturities by
issuing€350mofbondsdue2029.
Asat31December2024,committedborrowingfacilities
principallycompriseda€300mRCFmaturinginJuly
2027,theUKExportFinance(UKEF)facilitiesof€288m
and$230mbothmaturingOctober2027,€350mof
five-year7.375%seniorunsecuredloannotesmaturing
May2029andtheremaining€150moutstandingof
3.875%seniorunsecuredloannotesmaturingJuly
2025.At31December2024,theRCFwasundrawn
andtheUKEFfacilitieswerefullydrawn.
TheGroup’sundrawncommittedliquidityat
31December2024wasinexcessof£470m,comprising
unrestrictedcashandshort-termdepositsof£225.8m,
theRCFandothercommittedfacilities.
TheRCFandtheUKEFfacilitiesaresubjecttoone
leverageratiocovenant.Forprudence,theGroupagreed
in March 2024 to extend the period of temporary
covenant relaxation to ensure that appropriate
headroomwasmaintained.Accordingly,thenetdebt:
EBITDAratiosrequiredunderthecovenanthavebeen
setatnotmorethan5.75xinDecember2024,5.0xin
June2025and4.75xinDecember2025.Reducing
leveragefurthertowardsour1-2xmedium-termtarget
rangeremainsakeypriorityfortheGroup.
The Group’s net debt: EBITDA for the purposes of
theleverageratiocovenantincreasedfrom4.2xat
31December2023to4.6xat31December2024,
principally due to the higher net debt at the period
endasdescribedelsewhere.
TheGroupexpectsnetfinancingcostsofc.£60-65min
2025 as a result of interest rate movements, the recent
bondrefinancingandotherchangestotheGroup’s
financingarrangements.
Balance sheet
NetassetsoftheGroupdecreasedby4.7%to£1,107.7m
at31December2024,mainlyreflectingthelossin
theperiod.
Provisions
TheGroupprovisionsbalancedecreasedto£35.3m
comparedwithabalanceof£41.5masat31December
2023,mainlyreflectingcashutilisationof£7.3minthe
period, most notably in relation to restructuring and site
rationalisationactivities.
Retirement benefit plans
TheGroup’sprincipalfundeddefinedbenefitpension
schemes are in the UK and the USA and are both closed
tonewentrantsandfutureaccrual.TheGroupalso
operatesanunfundeddefinedbenefitschemein
Germanyandvariousotherdefinedcontribution
overseasretirementbenefitarrangements.
The Group’s net retirement obligation decreased by
£15.0mto£49.7mat31December2024(31December
2023:£64.7m),andreflectsthemarketvalueofassets
andthevaluationofliabilitiesinaccordancewithIAS19,
includinganassetof£26.0mfortheUKscheme,which
wasaffectedbya£4.4mchargeinrelationtoone-off
pastservicecosts.Thenetretirementobligation
reductioncomprised£19.8mofcashcontributions,
partiallyoffsetbyactuariallossesof£2.1m.During2025
theGroupanticipatesmakingc.£1.6mincontributions
totheUKscheme.
Synthomer plc Annual Report 202419
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear
Coatings&ConstructionSolutions
(
CCS
)
“ Our focus in 2024 has been on
enhancingorganicgrowthcapability,
disciplined investment in innovation and
improving our customer proposition,
and continued optimisation of our
manufacturingbase.”
Ana Perroni Laloe
President,Coatings&ConstructionSolutions
While mixed market conditions and a substantial share of higher
operating costs limited thescope for CCS to outperform in 2024,
ourmost speciality-focused division continued to enhance its
alignmentof people, capital and strategy to support long-term
profitablegrowth.
Main product applications
Architectural and masonry coatings
Waterproofing and flooring
Fibre bonding
Energy solutions
2024 revenue change vs 2023
Volume Price/mix FX Total
+2.4% (3.4)% (2.6)% (3.6)%
2024 revenue by end market
Total
£790.5m
Architectural coatings 26%
Industrial coatings 17%
Consumer materials 25%
Construction 20%
Energy solutions 12%
Total addressable market People Manufacturing sites
£9bn+ 2 ,10 0 17
Synthomer plc Annual Report 202420
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear / CCScontinued
CCSperformancereview
Full year ended 31 December
2024
£m
2023
£m
Change
%
Constant
currency
1
%
Revenue 790.5 820.2 (3.6) (1.0)
Volumes (ktes) 513.1 501.2 +2.4
EBITDA 85.9 100.1 (14.2) (12.2)
EBITDA % of revenue 10.9% 12.2%
Operating profit – underlying 60.6 74.3 (18.4) (16.6)
Operating profit – statutory 32.5 42.1 (22.8)
1 Underlyingconstantcurrencyrevenueandprofitretranslatecurrentyearresultsusingtheprior
year’saverageexchangerates.
Performance
Divisionalrevenuedecreasedby1.0%inconstantcurrencyto£790.5m
(2023:£820.2m),witha2.4%increaseinvolumeoffsetbylowerpricing,
reflectingpass-throughoflowerrawmaterialcosts.Theyear-on-year
volumegrowthwasdrivenbymarketsharegainsincoatingsaswefocus
onorganicgrowthgeographically,andanimprovementinconstruction
volumes,albeitfromverylowlevels.Consumeractivitylevelswereflat
whileouractivitiesinenergyendmarketsexperiencedaslowerrateof
growthfollowingareprofilingofordersfromcertainkeycustomersin
thesecondhalf.
Thedivisionwassuccessfulinimprovinggrossmarginsinallkeyend-market
areasapartfromconstruction,reflectingourongoingfocusonenhancing
thespecialitynatureofourofferingforcustomers.CCSgenerated£85.9m
ofEBITDA(2023:£100.1m)intheyear,equatingtoanEBITDAmarginof
10.9%(2023:12.2%).Thisreflectedthelimitedvolumegrowth,asignificant
share of the higher operating costs described previously, investment
inourinnovationpipelineandgeographicrangeofofferings,andthe
non-recurrenceofsometacticalinitiativesfrom2023.
CCSistypicallythemostseasonallyweightedofourdivisionstothefirst
half.In2024thiswasexacerbatedbytherelativelyslowergrowthinhigher
marginproductareasduringthesecondhalf.
Strategy
Ourprioritiesthroughout2024havebeenenhancingorganicgrowthcapability,
disciplined investment in innovation and enhancing our customer proposition,
andcontinuedoptimisationofourmanufacturingbasetoalignwithour
strategicambitions.
Duringtheyearwecontinuedtoleverageourleadingmarketpositions
innicheEuropeanmarketsintoothermarketsglobally.Throughamore
end-marketalignedapproach,withkeyaccountmanagementandvalue
selling,wearetargetingopportunitiestogrowourmarketshareparticularly
intheUSAandMiddleEast.
Duringtheyearwereviewedandbeguntooverhaulourapproach
toinnovationwithaviewtobecomingmoreend-customerfocusedandfaster
tomarketwithnewproducts.Wehavealsobeguntoincreasetheproportion
ofourinnovationworkthatfocusesonofferingmoresustainableproducts
utilisingbio-basedorcircularrawmaterials,whichisapointofincreasing
differentiationinmanyofourmarkets.
Allourgrowthplansareintegratedwithourassetoptimisationprojects
andothercostandcapacitymanagementactivities.Forexample,wehave
recentlyinvestedtoimprovethemanufacturingflexibilityofanumberof
ourmajorfacilitiesintheUSAandAsia,givingustheabilitytomanufacture
anumberofproductsinthoseregionsthatwerepreviouslyonlymadein
Europe.Wealsosuccessfullycommissionedasmallinvestmentwhich
enhancesourcoatingscapacityintheMiddleEast,andweareincreasing
ourfocusongrowingourcustomerbaseinChina,capitalisingonthe
Group’snewinnovationcentreinShanghai.
We continue to identify and take action on opportunities to optimise our
productionactivitiestoimproveassetutilisationrateswhilereducing
complexityandcost.OurFitchburg,Massachusettsfacilitysuccessfully
transferred products to other sites and ceased production ahead of
scheduleduringtheperiod,withthesitesubsequentlysoldafteryearend.
IntheyearwedeliveredasuccessfulAI-enabledpilotprojecttoenhance
throughputatoneofourcapacity-constrainedsites,asignificantnew
capabilityforourexcellenceteamswhichweplantoutilisemorewidely
acrosstheGroupasawholeinthecomingyears.
Synthomer plc Annual Report 202421
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear
AdhesiveSolutions
(
AS
)
“ While continued delivery on the
performance side remains a key
objectivein2025,wearealso
increasingly focused on the
longer-termgrowthofthedivision.”
Stephan Lynen
President, Adhesive Solutions
Main product applications
Tapes and labels
Tyres and plastic modification
Packaging and hygiene
2024 revenue change vs 2023
Volume Price/mix FX Total
+9.0% (5.0)% (2.8)% +1.2%
2024 revenue by end market
Total
£588.4m
Tapes and labels 33%
Plastic modification 12%
Packaging 9%
Tyres 14%
Hygiene 7%
Assembly and other 25%
Total addressable market People Manufacturing sites
£10bn+ 700 6
AS has achieved a step change in financial results this yearthrough our
successful performance and reliability improvement programme. We will
continue to build on this progress while increasing our focus on our
considerable global growth opportunities.
Synthomer plc Annual Report 202422
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear / AScontinued
ASperformancereview
Full year ended 31 December
2024
£m
2023
£m
Change
%
Constant
currency
1
%
Revenue 588.4 581.7 +1.2 +4.0
Volumes (ktes) 269.3 247.2 +9.0
EBITDA 47.9 31.2 +53.5 +57.1
EBITDA % of revenue 8.1% 5.4%
Operating profit/(loss) – underlying 15.0 (7.5) n/m n/m
Operating loss – statutory (9.5) (32.7) (70.9)
1 Underlyingconstantcurrencyrevenueandprofitretranslatecurrentyearresultsusingtheprior
year’saverageexchangerates.
Performance
Divisionalrevenueincreasedby4.0%inconstantcurrency,to£588.4m
(2023:£581.7m),outpacingasluggishunderlyingenvironmentfor
adhesivesendmarketsin2024.Divisionalvolumesincreasedby9.0%,
withspecialityproductareas(c.60%ofASrevenue)benefitingfroma
stronginnovationandopportunitypipelinewhileretainingrobustpricing.
Meanwhile,manybaseproductareasregainedsignificantmarketshare
fromglobalcompetitorsasaresultofourimprovedcostcompetitiveness.
Acrossthedivision,somepass-throughoflowerrawmaterialcostspartially
offsetthevolumegrowthinrevenueterms.
Withinthedivision,specialityproducts(suchasrosins,amorphouspolyolefins
(APOs),water-basedemulsionandpolybutadienepolymers)performedwell
throughouttheyear,particularlyingrossmarginterms,reflectingtheirgreater
differentiationforcustomers.Inourmorebasechemicalproducts(particularly
hydrocarbonresins),costsavingsoffsetongoingcompetitivepressurewhile
marginsbenefitedfromoperatingleveragetoimprovedvolumes.Acrossthe
division, market conditions softened modestly in the second half, including for
automotiveendmarkets.Geographically,volumeimprovedinallregions.
DivisionalEBITDAincreasedby57.1%inconstantcurrencyto£47.9m(2023:
£31.2m),withEBITDAmarginincreasingby270bpsto8.1%(2023:5.4%).
Thisveryencouragingperformancewasachieveddespitetheabsorption
ofthehigheroperatingcostsdescribedelsewhere,andreflectsthereturn
togrowthandtheperformanceimprovementprogrammethatwasput
inplaceinmid-2023bythenewdivisionalmanagementteam.The
programmedelivered£21minbenefitsin2024,slightlyaheadofour
expectations,withmoretofollowin2025andbeyond(seebelow).
Strategy
TheASdivisionhasmadesignificantheadwaythisyearthroughthe
dedicatedperformanceimprovementprogramme,whichhasfocusedon
systematicallytransformingtheadhesiveresinbusinessacquiredin2022.
The programme has reduced costs and improved end-to-end operations,
fromsuppliernetworkimprovementtoproductionsiteefficiencyand
deliverylogistics,enablingsubstantiallybetterserviceforcustomers.
Havingdelivered£26mincumulativebenefitsin2023and2024,the
programmeisnowexpandingitsobjectivefrom£25moriginallyto£35m+
incumulativebenefitsbytheendof2026.
Whilecontinueddeliveryontheperformancesideremainsakeyobjective
in2025,wearealsoincreasinglyfocusedonthelonger-termgrowthofthe
division.Weseeclearopportunitiestobuildonourleadingpositionsina
range of speciality adhesive applications in attractive end markets and our
multi-yearrelationshipswithmanyhigh-qualitycustomers,supportedby
aglobalproductionnetworkandcomprehensivetechnologyandservice
platform.Duringtheyearthedepthandnatureofourtechnicaldialogueand
jointprojectswithmanycustomershasevolvedconsiderably,particularly
inrelationtoinnovationandsustainability.Thisincludesreplacingsolvent-
basedpressure-sensitiveadhesivesinspecialitytapesanddevelopingnew
APOtypesforimprovedperformanceinpackagingandhygieneapplications.
OureffortsaresupportedbyachievingISCCPLUScertificationofourmajor
manufacturingsitesandsupportingdecarbonisationprojects.Thismeans
weareincreasinglywell-placedtopartnerbothupanddownourvalue
chainstomakethemmoresustainable.
Mostofourinvestmentforgrowthalsoaimstobuildonthestrengthsofour
speciality portfolio, such as our investment to increase APO capacity at our
Texasfacility,whichisexpectedtocomeonstreaminQ22025.Meanwhile,
inaccordancewithourdifferentiatedsteeringstrategy,inthebaseproduct
areaswecontinuetofocusanyinvestmentonenhancingcostcompetitiveness
orreliability,suchasourprojecttostrengthenoursupplychainforhydrocarbon
resinproductioninEuropewhichbegantoshipduringH22024asplanned.
Synthomer plc Annual Report 202423
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear
Health&ProtectionandPerformanceMaterials
(
HPPM
)
“ As a predominantly base chemicals
division,we’refocusedmainlyon
enhancingcostefficiencyacross
ourvaluechainwhileimproving
ouroverallvalueproposition
forcustomers.”
Rob Tupker
President,Health&ProtectionandPerformanceMaterials
Main product applications
Medical glove manufacture
Speciality paper and food packaging
Carpet and artificial turf
Polymer modifiers
Inorganic specialities
2024 revenue change vs 2023
Volume Price/mix FX Total
+14.1% +1.5% (2.8)% +12.8%
2024 revenue by end market
Continuing
£607.9m
Health & Protection 38%
Speciality vinyl polymers 8%
Paper 15%
Carpet 12%
Foam 6%
Acrylate monomers 12%
William Blythe 9%
Total addressable market People Manufacturing sites
£4bn+ 1,200 8
Heath & Protection activity levels increased substantially through the
year, albeit at unit margins that remain below pre-pandemic levels, and
we began a significant zero-capital technology partnership for the US
domestic glove market. Compounds was divested in 2024 and our
plans for other non-core businesses continue to make headway.
Synthomer plc Annual Report 202424
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear / HPPMcontinued
HPPMperformancereview
Full year ended 31 December (continuing)¹
2024
£m
2023
£m
Change
%
Constant
currency
1
%
Revenue 607.9 538.7 +12.8 +15.6
Volumes (ktes) 580.6 508.7 +14.1
EBITDA 36.5 26.3 +38.8 +40.3
EBITDA % of revenue 6.0% 4.9%
Operating profit/(loss) – underlying 8.4 (6.0) n/m n/m
Operating loss – statutory (9.5) (15.3) (37.9)
1 Laminates, Films and Coated Fabrics, North America Paper and Carpet and the Compounds
businesshavebeenreclassifiedasdiscontinuedoperations.
2 Underlyingconstantcurrencyrevenueandprofitretranslatecurrentyearresultsusingtheprior
year’saverageexchangerates.
Continuing divisional performance
Divisionalrevenueincreasedby15.6%inconstantcurrencyto£607.9m
(2023:£538.7m),underpinnedbya14.1%increaseinvolume.
Heath&Protectionvolumesimprovedby24.4%year-on-yearasthe
post-pandemicimbalancebetweensupplyanddemandinthenitrilelatex
for gloves market reduced further, driven mainly by continued underlying
hygienedemandgrowthglobally.However,forcontext,volumeshaveonly
nowrecoveredto80%of2019levels.Unitmarginsremainlowbyhistorical
standardsbuthaveimprovedoverthecourseoftheyear.Intheperiod,we
receivedaninitialtechnologylicensingfeepaymentthatisthefirststageof
themulti-yearcapital-freetechnologypartnershipwhichleveragesour
Health&Protectionintellectualproperty,technologyandmanufacturing
expertisefortheonshoreUSglovemarket.
InourPerformanceMaterialsportfolio,volumesincreasedby6.9%,ledby
SpecialityVinylPolymersandSBRforPaperinEurope,whiletradinginAcrylate
MonomersandSBRforcarpetandfoaminEuropehasbeenmorechallenging.
As predominantly base chemicals businesses, the division is highly
operationally leveraged to volumes and capacity utilisation, and in aggregate
achievedasignificantimprovementinprofitabilityatthegrossprofitlevel
over the year, supplemented by self-help cost reduction activities (including
themothballingofourfacilityinKluang,MalaysiawhichcompletedinH1
2024asplanned).Thiswaspartiallyoffsetbythehigheroperatingcosts
describedelsewhere–butdespitethis,divisionalEBITDAincreasedby
40.3%inconstantcurrencyto£36.5m(2023:£26.3m),withEBITDAmargin
improvingby110bpsto6.0%(2023:4.9%).
Strategy
OurdifferentiatedsteeringapproachtoourcoreHealth&Protection
businessfocusesprimarilyonenhancingcostefficiencyacrossourvalue
chainwhileimprovingouroverallvaluepropositionforcustomersthrough
selectiveinvestmentinprocessandproductinnovationandsustainability.
Forexample,inearly2025weestablishedapioneeringvaluechainin
partnershipwithsuppliersNesteandPCStomanufacturebio-basednitrile
latexforthegloveindustry,usingresponsiblysourcedbio-basedfeedstock.
We continue to enhance our market intelligence and understanding of
theendusersofourproducts(oftenmultiplestepsdownthevaluechain)to
identifyhigh-growthpotentialmarkets.Thissupportedourdecisionduring
2024toredesignateourSpecialityVinylPolymersbusinessascorefollowing
areviewofadjacentmarketopportunities.
We have also been carefully monitoring and seeking to position ourselves
fordevelopmentsinlatexgloveendmarkets,particularlyintheUSA.The
implementationofnewtariffsfrom1January2025,whichhasaffectedthe
competitorsofmanyofourcustomers,maycreategrowthopportunitiesin
thecomingyears.WewillcontinuetosupportourUSpartnerwithfurther
technologylicensingandmanufacturingexpertiseastheyworktobegin
constructionofonshoreUScapacityfornitrilelatexandglovemanufacture.
We continue to actively explore other potential partnership opportunities for
thisbusinesswithlittleornocapitalinvestment.Thedivision’sgrowth
potentialisalsoexpectedtobenefitfromSynthomer’snewChina
InnovationCentreinShanghai.
AttheendofApril2024,wecompletedthedivestmentofourCompounds
business to Matco Latex Services BV, reducing our manufacturing site
footprintbythreesites(twointheNetherlandsandoneinEgypt),as
describedelsewhere.
Three other non-core portfolio rationalisation processes continue to progress,
including the planned divestment of SBR for paper, carpet and foam
inEurope.
Synthomer plc Annual Report 202425
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear
Sustainability in focus:
turning insights into practical action
Thanks to new data, skills and relationships,
wehave made significant progress this year to
further embed sustainability into our everyday
business and create value for customers.
This year has been pivotal for Synthomer and our
sustainabilityagenda.Notonlyisitcontinuingto
support our strategy to drive value, it has increasingly
becomeabusinessprinciple,influencingthedecisions
thatourteamsmake.Thissustainabilitymindsethelps
us better anticipate and respond to customer needs
–recognisingthat,likeus,theyareincreasinglytaking
avaluechainapproach.Itsupportsourprogress
againstourVision2030roadmap,whichlaysouta
series of sustainability-related targets for the Group (see
below).Italsodrivestheinnovationandspecialisation
thatenableSynthomer’sgrowth.
Youcanseeagrowingmaturityinthewayweareusing
our product sustainability scorecard (as Robin Harrison,
our Vice President, Innovation describes on page 34)
and evolving our approach to sustainable procurement,
innovationandhumanrights,inthesystemsweare
buildingtosupportbetterdataanalysisandtheworkwe
aredoinginouroperationstoaddressourowncarbon
footprint.IknowfromconversationswiththeBoardthat
theyseeagreatersenseofownershipamongour
executivesanddivisionalleaderstoo.
Highlights from2024
• •
Launched our Bio, Circle and Clima
productpropositions
• •
Achieved ISCC PLUS accreditation for eight of our
manufacturing plants
• •
Completed a double materiality assessment in line
with future requirements for the European Union’s
Corporate Sustainability Reporting Directive (CSRD)
• •
Maintained our A- ‘leadership’ level for CDP Climate
• •
140 employees engaged through our
SustainabilityAcademy
• •
Implemented site sustainability audits under the
Together for Sustainability (TfS) standards
• •
Achieved top-quartile safety performance in our
industry for the second consecutive year.
“Theworkwedidlastyeartounderstandthegreenhouse
gasemissionsacrossourvaluechainsandengagewith
ourbusinessteamsonthetopichasledtoasignificant
changeinmindsetacrossSynthomer.”
Chris Brown
Vice President, Environment, Social and Governance
Synthomer plc Annual Report 202426
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear / Sustainabilityinfocuscontinued
Taking an holistic approach to our
valuechainrelationships
A lot of our progress has been made possible because
of data insights and our teams’ improved understanding
ofhowtousethoseinsightswiththeirstakeholders.
Datahasalwaysbeenimportant,butin2024itbecame
akeyenablerforsustainabilityatSynthomer,aswebuilt
on the comprehensive assessment of greenhouse gas
(GHG)emissionsinsideourvaluechainthatwe
conductedtheyearbefore.Theassessmenthas
provided an unprecedented level of granularity in terms
ofourcarbonfootprintforspecificrawmaterials,
chemistries,plantsandbusinesses.Thishasenabled
our business teams to have deeper conversations that
have more impact, and to take tangible action across
thewholevaluechain.
Theexamplesshown(right)demonstrateourabilityto
respondquicklytocreatevalueforourcustomersand
ourselveswhenwetakea‘wholevaluechain’approach.
Thatstartswithourcommercialteamsengagingwith
customers to understand their needs and sustainability
ambitions, and then our businesses, functions, innovation
andoperationsteamsworkingtogether,andwiththeir
stakeholders,suchassuppliers,tocreatetailoredsolutions.
Theyalsodemonstratehowwearebuildingour
sustainable procurement capabilities in direct response
toour2023GHGassessmentandnewclimate
transition action plan (see box on page 29),
Examples of our whole value chain approach
Adhesive Solutions (AS)
When a key customer asked us to help them deliver their ambitious sustainability goals, particularly reducing their
Scope3 carbon footprint for a significant part of their purchases from us, we rapidly mobilised a multi-disciplinary team
to investigate our options. Within six months, we were able to commercialise a new line of products branded as Regalite
TM
CLIMA, which offer a 20-40% reduction in carbon footprint compared to baseline, driven by utilisation of renewable
energy and feedstock sources in the production process of our manufacturing site in Middelburg, the Netherlands.
Coatings & Construction Solutions (CCS)
We used our internal expertise to support our commercial team to demonstrate the significant contribution of our product
in the customer’s own product carbon footprint. We then presented the customer with reduction options and incorporated
carbon cost benefits to show the true value of our lower-carbon product. One option resulted from extensive supplier
engagement to enable the sourcing of new lower-carbon versions of two key raw materials used in production. Our models
suggest this switch could eventually reduce our Group-level Scope 3 GHG emissions by 2%.
Health & Protection and Performance Materials (HPPM)
We developed cross-value-chain partnerships with upstream suppliers, glove manufacturers, distributors and end
usersto drive market demand for lower-carbon and sustainability-certified nitrile gloves. This included some of our
experts travelling to the USA with one customer to attend workshops with end users, including hospitals, to learn more
about their needs.
Synthomer plc Annual Report 202427
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear / Sustainabilityinfocuscontinued
GHG emissions are an increasingly important topic
forourcustomers,andwearepreparingourselvesfor
increasingdemandsandassurancesfromthem.For
example, our procurement team is using the more
detailed understanding of our Scope 3 GHG emissions
embeddedwithinourvaluechaintomakeinformed
choicesaboutwhatrawmaterialswebuy,andwhere
from–choiceslikesourcingnewlower-carbonbutyl
acrylateandbutadiene.
Therearesignificantchallengesassociatedwith
sourcinglower-carbonrawmaterialsandweare
workingwithourcustomers,suppliersandleading
industrygroupstoensurewehavethedigitaltools
anddatagovernancemodelstohelpovercomethem.
Our lifecycle assessment (LCA) and procurement teams
haveestablishedprocessesonhowwerequest,validate
andmanageESGdata,specificallyrelatedtoproduct
carbonfootprints(PCFs).Wewillcontinuetoimprove
these processes, and use the data insights they give us
toinformourprocurementandcontractingactivities.
Sowhilewestillhavemoreworktodo,thiswillhelpus
improvethewayweconsideremissionsinourbuying
decisions alongside other, more traditional criteria, such
asprice,availabilityandquality.
Building trust across our value chain
Alongside data, trust is the common thread that runs
through all the divisional examples on page 27,above.
And, given the scale of the climate challenge, they
demonstratehowimportantitisthatwemovebeyond
‘transactional’ relationships to a more radical form of
collaborationacrossthevaluechain.
Trustrequirescredibility,reliabilityandawillingnessto
listenandlearnfromoneanother.Whatwehaveheard
fromourcustomersthisyearisthattheywantourhelp
toaddresstheirupstreamScope3GHGemissions–
whichtypicallyrepresentthelargestpartoftheircarbon
footprint.Onecompany’sScope3emissionsis
another’sScope1and2,meaningthatinawholevalue
chain,eachcompanyholdsapieceofthecarbonjigsaw
puzzle.Ourpositionwithinthevaluechainmeanswe
have an opportunity and responsibility to share our pieces
ofthatpuzzle,andencourageotherstodothesame.
Whenwedo,wecanmakemoreinformed,collective
decisionsthatdrivemeasurableactionanddelivervalue.
Inrecentyearswehavefocusedonbuildingthatcredibility
throughoutthevaluechain.Forexample,ourLCAteam
hasdevelopedasuiteofdetailedPCFreportswithan
externallyverifiedmethodologyandcompliantwiththe
TfSguidelines.WesharethePCFreportswithour
customers so that they can understand the precise impact
ofourpolymers.Ourcommercialandprocurementteams
havealsoworkedtobuildthesustainabilityknowledge
theyneedtotalkconfidentlywiththeirstakeholders.
Weknowthisapproachisworkingbecauseourcustomers
tellus.Forexample,wehavehadfeedbackappreciating
the granularity and transparency of our PCF reports and
addingthatitgivesthemconfidencethatwecancreate
solutionsthataddresstheirspecificchallenges.
Building deeper relationships for radical collaboration throughout the value chain
Supplier
insights
Operational
insights
End-market
insights
Customer insights
Innovation
Integrate into decision making and business models
Raw
materials
Manufacture
Formulation
andproduction
Product use
Responsible
disposal
Synthomer plc Annual Report 202428
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear / Sustainabilityinfocuscontinued
We are also proud to be an active member of the
TogetherforSustainability(TfS)initiative–enablingus
toworkwithourpeerstodrivecollectivechangeacross
thechemicalssector.Agoodexampleofthatisour
workwithTfStodevelopnewproductcarbonfootprint
standards to create a consistent approach across
oursector.EightofoursitesarenowISCCPLUS
certified.ThisallowsustooffercustomersourBIOand
CIRCLEproductsusingthemassbalanceapproach.
Ourofferofproductscontainingrenewable/circular
feedstock is made possible through value chain
partnerships,bothwithcustomersandsuppliers.
InAsia,wehaveteamedupwithNesteandPCSto
establishoneofthefirstISCCcertifiedvaluechains
tomanufacturebio-basednitrilelatexfortheglove
industry using responsibly sourced bio-based
feedstockinamass-balanceapproach.
AndourCCScoatingsbusinesshasjustlaunched
RevacrylAE3723BIO,a50%mass-balancebio-based
emulsion that keeps all the performance properties,
whileprovidingalower-carbonbenefittothecustomer.
Continuing to strengthen our
sustainabilityinsights
ThisyearweappointedanewSustainabilityDataInsights
andGovernanceDirector,whoworkscollaborativelywith
ourbusinessesandfunctionstoensurewehaverobust,
fit-for-purposedata–andthesystemstocollectand
analyseit–tohelpuscontinuetomakemoreinformed
strategicdecisionsandsupportourcustomers’needs.
Shehasworkedwithourthreedivisionstodevelopa
GHG forecasting model to help them assess the carbon
impact of each product alongside its commercial
impact,givingourbusinessesanholisticviewwhen
makingtheirfive-yearstrategyplans.
WeareworkingwithourITteamtodevelopnew
digitaltoolstostrengthenourforecastingcapabilities.
Thisworkisparticularlyimportantforthelonger-term
aspects of our carbon transition action plan, since it
willhelpinformthefutureofourinnovationpipeline
andthenewbusinessmodelswewillneedtosupport
alower-carbonworld.Thesetoolswillalsohelpustake
therightproductstomarketmorequickly.
Embedding sustainability across Synthomer
We also need to make sure that our day-to-day processes
anddecisionmakingaresetupinawaythatallowsour
people to unlock the full potential of our innovation
pipelineatspeed.OurnewInnovationTaskforceis
designedtohelpusdothat.(Seepage35.)
Sustainability at Synthomer has evolved from being a
set of important standalone goals to being customer-
centricandfundamentaltoourbusiness.Itisnowpart
ofourGroup-wideperformanceexcellenceprogramme,
SynthomerExcellence,andwehavesetupanew
Sustainability Academy to deliver foundation-level and
role-specifictrainingtohelpmoreofourcolleagues
engagewiththeirstakeholderswithgreaterfluency
andconfidenceonsustainabilitytopics.
Our new climate transition action plan
This year we developed a new climate transition action
plan to support our journey towards net-zero. This will
focus on four specific areas and is set out across three
time horizons (2025, 2026-2030 and 2030-2050).
Our plan lays out four key areas of focus:
• •
Integrating a GHG forecasting model into our
business plans to identify the product innovation
and market development options to reduce our GHG
emissions over the next five or more years
• •
Reducing Scope 1 and 2 GHG by continuing to
deliver our current five-year capital improvement
plan, driving energy efficiency through our
manufacturing excellence programmes, sourcing
100% renewable electricity for all our sites and
developing net-zero roadmaps for three pilot
manufacturing sites
• •
Reducing Scope 3 GHG by selectively sourcing
lower-carbon fossil-based feedstocks, sourcing
certified sustainable feedstocks, developing value
chain partnerships and innovating novel (bio- and
circular) feedstocks and products
• •
Risk assessment and scenario analysis to further
develop our strategic understanding of climate risk
and its financial impacts for our business.
The area where we can make the biggest, fastest
impact between now and 2030 is sourcing lower-
carbon fossil-based feedstocks, though we need to be
working on all areas in parallel to ensure we see the
benefits in the medium and longer term.
Synthomer plc Annual Report 202429
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Reviewoftheyear / Sustainabilityinfocuscontinued
Conducting our first double materiality assessment
This year we updated our Group-level 2021 materiality
assessment with our first double materiality
assessment (DMA). The DMA required us to assess
the actual or potential effects of our operations on
people and the planet, as well as how sustainability
issues might affect our financial performance and
position. This involved:
• •
Mapping our value chain and stakeholders to help
us create a longlist of our risks and opportunities
and their potential impact on stakeholders
• •
Engaging with key stakeholder groups, such as
employees, investors, customers and suppliers
tovalidate the longlist
• •
Assessing the financial materiality of those risks
and opportunities on our business as well as their
likely societal impact to help us set and validate
specific materiality thresholds.
As a result, we have identified the topics aligned
withthe European Sustainability Reporting Standards
(shown in the graphic to the right) that are most
material to our business at a Group level and a
provisional list of material impacts, risks and
opportunities. We are nowassessing and finalising
ourkey performance indicators and potential
changesto our Vision 2030 roadmap.
»
For further information on our approach to
materiality see Synthomer.com
While the DMA confirmed that the majority of our
Vision 2030 targets are focused on our most material
areas, communities did not reach the materiality
threshold, and we have decided to remove our
Vision2030 communities target.
This adjustment to Vision 2030 does not change our
commitment to being a good corporate neighbour: the
Synthomer Foundation continues its important work to
support local communities in the USA and our global
volunteering network continues to grow.
IMPACT MATERIAL
NON MATERIAL
DOUBLE MATERIAL
FINANCIAL MATERIAL
Own workforce
Workers in the
value chain
Water and marine
resources*
Affected
communities
Biodiversity and
ecosystems
Consumer and
enduser
Pollution
Business
conduct
Resource use
and circular
economy
Product
stewardship
Climate change
Financial impact on Synthomer
Synthomer’s impact on people and the environment
Environmental matter
Social matter
Governance matter
Entity-specific matter
* WaterandmarineresourcesisidentifiedasmaterialfortheSynthomerentities
inFranceduetomanufacturingsiteswithhighwaterstress.Onagloballevel,
thisimpactisnotdeemedmaterialasitisconfinedtothesitesinFrance.
Synthomer plc Annual Report 202430
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear / Sustainabilityinfocuscontinued
Preparing for regulatory changes
Sustainability regulation is a fast-moving landscape, and
wecontinuetomonitordevelopmentsastheyemerge,
including around the European Union’s Corporate
SustainabilityReportingDirective(CSRD).Wemust
bereadyforanychanges,whichmeanslayingthe
groundworkwellinadvanceofourreportingrequirements.
Thatincludesoursustainabilityteamworkingwithour
financialleadershipteamtohelpthemunderstandwhat
sustainability-relatedregulatoryrequirementsmaymean
forSynthomer,ourreportingandassurance.Meanwhile
ournewDataInsightsandGovernanceDirectoris
lookingatthesystemsweneedtoreporteffectively
againstthecurrentrequirementsoffutureregulation.
CSRDisjustoneelementofthechangingregulatory
landscape.Wealsoneedtobepreparedforothernew
legislation, including the EU’s Due Diligence Directive,
CarbonBorderAdjustmentMechanismand
DeforestationRegulation.Differentregionsarealso
introducing regulation at different speeds in areas such
asproductsafety.Wehaveseenthenumberof
product-relatedcompliancequestionsfromcustomers
andotherstakeholdersincreasebyaround15%inthe
pastfiveyears,oftenintertwinedwithquestionson
otherissues,likesustainabilityandquality.Wefocuson
ensuringwehavetheappropriaterepresentationacross
allourmaingeographiestocomplywithexisting
regulationandstayabreastofpotentialchanges.
Continued progress against Vision 2030
We provide more detail on performance against our
Vision 2030 targets on pages 41 to 43, but, as last year,
wecontinuetomakegoodprogress.
Highlightsincludeanotherhistoriclowinourrecordable
injurycaserateof0.14,meaningweremaininthetop
quartileforourindustryforthesecondconsecutiveyear.
»
See People in focus on pages 36 to 40
WehavealsocontinuedourworktoaddresstheScope
1,2and3GHGemissionsacrossourentirevaluechain.
Intermsofperformance,wehitourrenewable
electricitytargetforthefourthyearrunningandwe
continuetoreviewouroptionstoparticipateinpower
purchaseagreements.
We have also seen an improvement in our expected
futurewaterresiliencethankstotheworkwestartedin
2023toestablishsustainablewatermanagementatour
siteslocatedinareasofhighwaterstressandwithhigh
wateruse.
Looking ahead
Thisyear,2025,marksthemidpointbetweenlaunching
Vision2030andthedeadlineforrealisingourtargets.
Thereisstillplentytodo,andtherewillbechallenges
alongtheway,buteverythingwehaveachievedsofar
givesmeconfidencethatweareingoodshape.
But2030isamilestone,notthefinaldestination.
Sowewillcontinuetoshiftourfocustowardsradical
collaborationwithcustomersandsuppliers,andto
ensurewehavetheskills,dataandprocessestotakea
more agile, proactive approach to sustainability-driven
marketopportunities.Wehaveputstrongfoundations
inplace.Nowitistimetobuildonthem.
More information on our
approach to sustainability
We provide more information on the work we are
doingto understand our climate-related risks and
opportunities in our Climate Action report, summarised
on pages 58 to 61.
We obtain independent assurance for our ISO
management systems and independent verification at
alimited assurance level of our Scope 1, 2 and 3 GHG
emissions. We benchmark our progress, and identify
areas where we can improve our performance through
disclosures to organisations including CDP, Ecovadis,
S&P, London Stock Exchange Group and MSCI.
This year, we maintained our A- ‘leadership’ level for
CDPClimate. We continue to work closely with industry
bodies such as the Chemical Industries Association in
the UK, the European Chemical Industry Council (CEFIC),
and the American Chemistry Council in the USA.
Formore information, see Ratings and Resources on
ourwebsite.
We provide more informationon our most relevant
sustainability issuesin our ESG Performance Summary
and in a series of in-depth insights that are available on
ourwebsite.
Environment
Climate action
Water
Waste and pollution
Social
Healthandsafetyintheworkplace
Workers in the value chain
Product safety
Diversity,equityandinclusion
Communities
Governance
Business conduct
Synthomer plc Annual Report 202431
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
ReviewoftheyearReviewoftheyear
DELIVERING: Our strategy in action
When it comes to food packaging, nothing is more important than
keeping consumers safe.
ThankstoournewPlastvance
TM
Tproduct,ourcustomerscannowmake
lower-carbon,morerecyclablepackagingwithoutcompromisingonsafety
ormakingmajorchangestotheirproductionprocesses.
Our Adhesive Solutions business developed Plastvance
TM
Ttohelpfood
packagingmanufacturersswitchfrompolystyrenetopolypropylene.This
matters because polypropylene is thinner, but more durable, than polystyrene,
meaningithasalowercarbonfootprint.Importantly,italsomeetsstrictfood
packagingregulationsintheUSA,EuropeandChinaandcanberecycled.
Historically,suppliershaveconsideredtheswitchunworkablewithout
significantcapitalinvestment.However,weconductedourownpackaging
filmtrialstodemonstratetosomeofthebiggestfoodbrandsthatbyusing
Plastvance
TM
Tasaplasticmodifier,polypropylenecanbethermoformed
usingexistingpackagingmachinerywithoutadditionalcost.
SomeofthebiggestnamesinthefoodindustryarenowtriallingPlastvance
TM
T
intheirownfacilitiesandweexpectsignificantsalesin2025.Itisagreatexample
ofhow,byunderstandingendusers’needsandapplyingfocusedinnovation,
wecanputattractiveproductsinthehandsofourcustomers.
INNOVATING:
With end customers in mind
Our success depends on our talented people, and we want to make
surethey have the right skills and capabilities to help us achieve our
strategic objectives.
Thatiswhy,despiteongoingmarketchallenges,wecontinuetoinvestin
employeedevelopmentacrossalllevelsofthebusiness.Inmanycases,
ourprogrammeshavehelpedpeopleacceleratetheircareeratSynthomer.
Through our graduate programme, university graduates participate in a
structured,two-yearlearningscheme.Thisoffershands-onexperience,
strategicprojectworkanddirectaccesstomentoring,learningevents,and
networkingopportunitieswithseniorleaders.Thisyear,11graduatestookpart
inthescheme,and50currentSynthomerpeoplehavebenefitedsince2018.
Our Accelerated Leadership Programme is designed to support nominated
high-potentialtalentateverystageoftheirSynthomercareer.Wealsooffer
arangeofvirtualleadershiptrainingopportunitiesopentoall.Meanwhile,
everyoneatSynthomerhasaccesstoourinternalleadershipdevelopment
framework–calledSynthomerUniversity–whichfocusesonleadershipskills
andperformanceexcellence.AndourExcellenceAcademydeliverstargeted
skillstraininginkeybusinessareasincludingcommercial,sustainabilityand
procurement.Byinvestinginourpeople,wecultivatehome-grownfuture
leaders,fosterinnovation,andcontinuetodriveSynthomer’stransformation.
DEVELOPING:
Our skills and leadership training
Gillis du Toit, Energy and
Sustainability Engineer
2024 Synthomer
graduateprogramme
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Synthomer plc Annual Report 202432
Reviewoftheyear / Ourstrategyinactioncontinued
In 2024, we implemented a digital transformation project at our
LeHavre manufacturing site in France to increase the production
capacity of a key product line andmeet growing market demand.
Theprojectteamusedmachinelearningalgorithmsandartificialintelligence
togeneratenewdataandinsightstohelpoptimisethecycletimesofourbatch
reactors–acorestageintheproductionprocess.Theteamimplementedthe
resulting technical solutions, supported by a structured change-management
frameworktoencouragecollaborationandagileteamworkacrossdifferent
areasofexpertise.
Usingadvancedanalytics,theteamwasabletocapturecriticaloperational
knowledgeandincreasevisibilityacrosstheproject’sperformancemetrics,
deliveringrapidresultsinaniterativemanner.Thishasledtonewwaysof
workingandgeneratedactionable,data-driveninsightsthathaveimproved
processefficiencyandreducedcycletimesbyasmuchas19%.Ithasalso
helpedlowerenergyconsumptionperbatch,unlockedoperationalimprovements
andempoweredtheteamatLeHavretoadoptdata-drivendecisionmakingto
continuouslyimproveperformanceanddrivelong-termsuccess.Wearenow
sharingthetools,techniquesandkeylessonsfromthisprojectacrossSynthomer.
OPTIMISING:
Using data to optimise operational efficiency at Le Havre
Around the world, our innovation centres of excellence help us create
the specialised, highly differentiated products that our customers
need. This year, that innovation network grew with the official
openingof our new China Innovation Centre (CIC) in Shanghai.
The£6mcentreishometomorethan10researchanddevelopment
laboratories,strengtheningourinnovationcapabilitiesinwhatistheworld’s
largest–andfastest-growing–chemicalsmarket.
Thefacilitieswillenableourteamofscientists,techniciansandtechnical
servicesmanagerstodesignandtailorinnovativeproductsspecificallyfor
Chinaandthewiderregion.Itbringsusclosertoourcustomers,andhelps
usstrengthenourpresenceinamarketwhereweseeexcitinggrowth
opportunitiesoverthenextdecade.
TheCICisoneofourfiveinnovationcentresofexcellenceandseven
technicalcentresthatweoperateglobally(seepage35forafulllist).
SPECIALISING:
Opening our new China Innovation Centre
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Synthomer plc Annual Report 202433
Reviewoftheyear
Innovation in focus:
tangible progress in meeting customer needs
Newproductsthisyearincludeahydrophobicdispersion
technologyplatform(HDT)allowingdirect-to-metal
applicationofawater-bornecoatingdeliveringgood
adhesionandanti-corrosionproperties.Thiswillallow
manyofourcustomerstomoveawayfromsolvent-borne
coatingsformetalapplicationsinoutdoorenvironments.
Muchofthissuccessisaresultofourworktoensurewe
havetherighttoolsandresourcestomeetthatgrowing
demand.Forexample,ourproductsustainability
scorecard as part of our strategic scorecard continues
toprovideaclearframeworkfordiscussingproduct
developmentandshapingportfoliodecisions.Asa
result,wenolongerhaveanyprojectswithanegative
sustainabilityscore.
Meanwhile,ourcomprehensiveassessmentofGHG
emissions inside our value chain in 2023 is having a
significantimpactonourinnovationchoices.InCCSfor
instance,wehavesourcedlow-carbonimpactbutyl
acrylate(BA)andbutadiene(BD)(twokeyrawmaterials),
whichwewillpilotatscalein2025.Thisisadirectresult
ofourcarbonassessment,whichidentifiedfossil-based
BAandBDassignificantcontributorstoourGroup-level
upstreamScope3emissions.Ourmodelssuggestthat
switchingcouldreducethoseemissionsby2%.
Innovation is key to adding value for customers
and differentiating our specialised portfolio,
andthis year we have continued to transform
ourproject pipeline.
Everythingwedoininnovation–developingnewor
enhancedproducts,moreefficientprocessesornew
applications–isdesignedtobringusclosertoour
customers’needsandtosupportourgrowthstrategy.
Those needs are increasingly driven by demand for
productswithsustainablebenefits,whichiswhyweare
pleasedthat,onceagain,weexceededourVision2030
sustainableproductsgoal.Inall,welaunched38new
productswithenhancedsustainabilitybenefitsthisyear,
representing69%ofallproductslaunched(2023:64%).
»
See page 41 for more details on our Vision
2030 sustainable products performance.
Building strong relationships across
thewholevalue chain
AsChrisBrownalsodiscussesonpage28,whiledatais
important, meaningful change in a complex global value
chainwillonlybepossibleifweworktogether–withour
customers, their customers, our suppliers and other
relevantstakeholders.
Here,too,weareseeingexamplesofthisinaction.
InAS,wehavedevelopedPlastvance
TM
T,whichhelps
foodpackagingcustomerstoswitchfrompolystyrene
topolypropyleneforsomeapplicationswithoutmajor
changestotheirproductionprocesses.Seemorein
ourcasestudyonpage32.
We are also looking beyond our traditional value
chainrelationshipstohelpcreatemeaningfulchange.
InHPPM,wearedevelopingastyrene-butadienerubber
polymerforuseincarpetbackingthatallowsthefibres
fromthecarpettoberecycledatendoflife.Butwhile
“ We are seeing great examples of
our teams turning analysis into
practicalactionacrossSynthomer.”
Robin Harrison
Vice President, Innovation
Highlights from 2024
• •
Opened innovation centre of excellence in
Shanghai,China.
• •
Exceeded our Vision 2030 sustainable products
target for the second consecutive year.
• •
Winner of the Chemical Industries Association
Sustainability Award for our product sustainability
scorecard – marking the third year in a row it has
received external recognition.
• •
First sales of FSC-certified resin to a tyre customer.
• •
Launched a new polymer that will help reduce the
weight of latex gloves, lowering their overall
carbonfootprint.
Synthomer plc Annual Report 202434
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear / Innovationinfocuscontinued
customerscanseethepotentialbenefitoftheproduct,
itwillnotaddvalueforthemuntiltherearerecycling
facilitiesthatcanprocessit.Sowearetalkingtorecycling
firms,tocreateanend-to-endjourneyforaspecialised
productthathasclearenvironmentalbenefits.
Creating a more valuable,
efficientinnovationpipeline
AswellasexceedingourVision2030target,we
exceeded our aim to ensure that NPPs make up at least
20%ofoursalesvolume–theNPPmetric–overthe
longterm.Thisyearwereached24%(2023:22%).
Newproductinnovationoftenrequirescollaboration
betweenourglobaltechnologyplatforminnovation
team and divisional innovation teams to tailor solutions
for customers and respond to changing consumer and
markettrends.
Thisyear,forexample,ourcentralteamworkedwithCCS
toreviewcustomerevaluationsofpilot-scalebatches
fromournewbio-basedemulsionspolymerplatform.
Early feedback from our customers has been positive
andwehavebegunnewproductdevelopmentactivities
withintheCCSinnovationteam.Theteamisnowworking
withAStolookatdevelopingbio-basedandhybrid
binder systems for paints and coatings applications,
and the next generation of emulsion polymers for
pressure-sensitive adhesives using bio-based
monomersinthesameplatform.
Digitalisation and machine learning can dramatically
accelerateourinnovation.Theemulsionspolymer
systemisagreatexample.Itisoneofthefirstprojects
in Synthomer to use advanced experimental design and
data analytics to help identify and predict the precise
compositionsweneedtodeliverspecificperformance
requirementsinnewpolymers.Meanwhile,wehave
launchedahigh-throughputpolymerisationproject,
spunoutofacollaborationwiththeUniversityofLeeds,
thatcouldalsosignificantlyincreasethespeedofnew
productdelivery.
Speedmattersifwearetomaintaincompetitive
advantage.Weknow,forexample,thatinterestin
sustainabilityinmarketslikeChinaisacceleratingrapidly.
Wearewellplacedtomeetthatgrowinginterestthanks
toournewestinnovationcentreinShanghai,China.Its
state-of-the-artlaboratoriesaredesignedtospecifically
supportlocalproductdevelopmentinthelocalmarket.
Our new Innovation Taskforce
Wewanttokeepthismomentumgoing,whichiswhywe
havesetupanewInnovationTaskforce.Thetaskforceis
chaired by our non-executive director Roberto Gualdoni,
and includes other non-executive directors, members
ofourExecutiveCommittee,someofourGroupand
divisionalinnovationleadersandourVPofESG.
Followingadeep-divereviewwithfourBoardmembers
inSeptember2024,thetaskforcehassetupthreework
programmes.Thefirstislookingatwaystoimprove
thevalueofourinnovationpipeline,andincludesanew
exploratoryinnovationteam,whichisalreadyreviewing
optionsinmarketscloselyadjacenttoourcurrent
portfolio.Thesecondaimstoredesigntheinnovation
operating model to drive improved innovation delivery
andvaluecreation.ThethirdlookstopilotAI/machine
learningtodrivegreaterspeedtomarket.Combined,
thechangesdeliveredbytheseworkprogrammeswill
createanewcultureofinnovationforthelong-term
deliveryofourmarketandsustainabilityneeds.
Working in partnership to accelerate innovation
Oneofthebestwaysinwhichwecanaccelerate
innovationisbyworkinginpartnershipwithacademia.
Thisyear,weworkedwiththeUniversityofMontpellier
andUniversityofYorktodevelopanewmonomer
systemandformulationadditiveswithhighbio-based
carboncontent.Wethenevaluatedtheirperformance
inreal-worldsystemswithpositiveresults,andin
November2024wefiledapatentbasedontheadditive
technology.Wearenowlookingtoevaluatethenew
additivewithourcustomers.
Meanwhile,weextendedourprogrammewiththe
University of York, thanks to a prestigious ‘Prosperity
Partnership’grantfromtheUKGovernment,whichwill
enable us to evaluate the next generation of bio-based
monomers, aiming to drive decarbonisation and
defossilisationinthespecialitypolymerindustry.
Looking ahead
Designingwithsustainabilityinmindhasbecome
‘businessasusual’forourinnovationteams.Buttheway
wedoitisevolving,thankstonewdataanddigitaltools
andtheworkofourInnovationTaskforcetodrivegreater
efficiencyandspeedtomarket.Thesewillcontinuetobe
important areas of focus in the coming year, ensuring
ourinnovationpipelinecontinuestodowhatmatters
most–servingtheneedsofourcustomers.
Our innovation centres
Our centres of innovation excellence, which provide
products and process innovation across all our divisions:
Akron, USA
Harlow, UK
Marl, Germany
Shanghai, China
Kulai, Malaysia
Our market-specific technical centres:
Chester, Jefferson, Longview, USA
St Albano, Italy
Sintra, Portugal
Accrington, UK
Middelburg, the Netherlands
Synthomer plc Annual Report 202435
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Reviewoftheyear
People in focus:
a maturing approach to supporting our people
Our people’s commitment to our customers and
delivering the products they need has played an
essential part in our strategic progress this year.
Ouremployeesareattheheartofoursuccess,whichis
whywecontinuetobuildanincreasinglyinclusiveand
dynamic culture that supports diversity of thought and
encouragesemployeestosharetheirviews.
Strengthening employee engagement
We are particularly pleased that so many employees
chose to participate in this year’s global employee
survey,YourVoice.Itwasourfirstsince2021and,inall,
80%ofemployeessharedtheirviews–7%morethan
threeyearsago.
Weachievedanoverallengagementscoreof7.0out
of10,whichpositionsusinthemiddleofourchosen
external benchmark and represents an improvement
onour2021performance.Thisisagoodresultgiven
howmuchinternalchangeandexternalturbulence
ouremployeeshavehadtonavigateinrecentyears.
Weareencouragedbythepositivescoresforquestions
onsafety,ethicsandcompliance,whichsitattheheart
ofourcorevalues.Atthesametime,employeeswould
like to see opportunities to further strengthen career
development and provide more support in times of
transitionandchange.
Our people priorities
We have updated our priority areas to ensure they
continue to support Synthomer’s overall business
strategy. They are:
• •
Creating a compelling employee value proposition
and fostering an innovative workplace
• •
Cultivating talent and capability to drive portfolio
transformation and growth
• •
Driving HR excellence in optimising processes
andexecution
• •
Integrating strategic workforce planning for
differentiated talent allocation
• •
Promoting engagement and wellbeing through
holistic development and inclusive culture.
Highlights from 2024
• •
80% of employees responded to our global
YourVoice engagement survey, helping us achieve
our Vision 2030 employee engagement target
• •
Introduced new Global Recognition Framework
withmore than 60 nominations received for
ourinaugural Group Inspire Awards
• •
Strengthened our diversity, equity and inclusion
commitment with new recruiting guidelines,
continued focus on inclusive leadership and
newpilot initiatives to drive gender diversity
• •
Launched Synthomer University with emphasis on
leadership development, including three regional pilots
for a new Operations Supervisor programme and three
regional Emerging Leader programme cohorts
Board engagement
Our Board-level Employee Voice engagement initiative
gives Board members the opportunity to actively
engage with our people. This year, Board members
held 11 face-to-face and virtual meetings across Asia,
Europe and the USA.
We also introduced a new Board report summarising
the status of our graduate programmme activities
during the year. This was combined with a ‘show and
tell’ session at our headquarters in London, giving six
graduates the opportunity to meet Board members and
share their experiences.
More information on the Board’s engagement with
employees and other stakeholders is available on pages
76to 81.
• •
80% participation
• •
7.0 overall engagement score
• •
More than 25,000 individual comments
Synthomer plc Annual Report 202436
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Reviewoftheyear / Peopleinfocuscontinued
Employeeengagementiskeytoourstrategyandweare
committed to turning the survey results into positive
actions.Wealreadyhaveagoodtrackrecord.Our2021
surveyledtomorethan250specificactions,and
progress in several key aspects of our people agenda,
suchasdiversity,equityandinclusion(DE&I)and
internal communications, is directly linked to previous
surveyresults.YourVoiceactionplanningwillbeone
ofourkeypeopleprioritiesfor2025.
Supporting employee health and wellbeing
HavingestablishedanewSynthomerWellbeing
Committee and Employee Assistance Programme in
2023,wefocusedonspecificactionin2024,including
embeddingwellbeingprioritiesintosite-specificsafety,
healthandenvironment(SHE)goals.Wealsointroduced
widerinitiatives,suchasaWorldMentalHealthDay
campaignandfinancialwellbeingsessionsinAsia.To
helpmonitorourprogress,wehavealsoestablisheda
newhealthandwellbeingdashboardaspartofour
peopleanalyticsreporting.Weaskedspecifichealthand
wellbeingquestionsinour2024YourVoicesurveyto
helpusunderstandtheimpactourworkishaving.
Strengthening the way we manage recognition,
talent and performance
Thisyear,wecreatedamoregloballyconsistent
approachtoemployeerecognition,withamulti-tiered
frameworkthatincludesanewGroup-wideawards
programmecalledtheInspireAwards.LaunchedinMay
2024,itreceived60nominationsfromaroundtheworld.
OurExecutiveCommitteechosethethreewinning
teams,whowerethenputforwardforourSynthomer
ChoiceAward.ThiswaspresentedatourGlobal
LeadershipTeameventtoJeganeswaranAnnamala,
TechnicalServiceManagerinHealth&Protection,for
hisworkduringtheyearwithakeynitrilecustomer.
We continued to focus on development conversations
tostrengthenourtalentpipelineandsupportcareer
development and succession planning, and introduced
anewtalenthealthcheckframework.
We have made good progress in embedding our
performancemanagementframework,withcompletion
rates for goal setting, mid-year conversations and
summaryconversationswellabove90%.Weare
alsoexpandingtheinclusionofindividualorteam
performanceintobonusesforwiderpartsofthe
organisation to recognise the strong contribution
ouremployeesmakeduringchallengingtimes.
Growing local support for our DE&I agenda
Diversity,equityandinclusion(DE&I)remainsacore
pillar of Synthomer’s strategy and our approach is
maturingeveryyear.Wewereparticularlypleasedto
ranksecondatthe2024SCIInnovation&Sustainability
Awards,withjudgesnotingourworktosetupour
DE&I-focusedemployeeresourcegroups,ourInclusive
LeadershipprogrammeandourDE&Iambassador
networkinAsia.
ThatnetworkoflocalDE&Iambassadorscontinues
togrow,withnewrepresentativesacrossEMEAand
theUSA.
Wecontinuetoraiseawarenessandbuildskillsthrough
initiativeslikeourinclusiveleadershiptrainingandanew
unconsciousbiascampaign.Ournewrecruitingguidelines
willhelpensurewehavediverseselectionpanelsin
placeandremovebiasfromourrecruitingprocess.
Our employee resource groups
We have three DE&I employee resource groups:
ENGENDER – our women’s network
THRIVE – our LGBTQ+ network
EMPOWER – our cultural diversity network.
Our gender diversity statistics
All employees
Female 960
Male 3,129
Not declared 13
Total 4 ,1 0 2
23.4%
female
Board
Female 3
Male 7
Total 10
30%
female
Senior management
Female 14
Male 34
Total 48
29.2%
female
Synthomer plc Annual Report 202437
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Reviewoftheyear / Peopleinfocuscontinued
Monitoring our progress
WemonitorprogressviaourDE&Idashboard.Weadded
anewelementtothedashboardthisyeartoshowthe
agedifferencesinourteams.Withthenumberof
youngerteammembersontheriseandagrowing
number of more experienced members reaching
retirementweintendtousethisdatatoimprove
waysthatthosedifferentgenerationscanlearnfrom
oneanother.
Our Board and Executive Committee continue to actively
supportourDE&Iprogramme,providinggovernance
viaourDE&IAdvisoryBoardandoftenengagingwith
employee resource group events, as described in
TheBoard’syearonpage67.
»
For more on Board-level diversity, see our
Nomination Committee report on pages 95 to97.
Wehavecontinuedtomakeprogresstowardsour
Vision2030genderdiversitytarget,withfemalesnow
representing23.4%ofourworkforce.Thepercentageof
females in senior management has fallen slightly to
29.2%whileourBoardis30.0%female.Despitethe
slightdeclineversusthepreviousyear,weremain
confidentaboutournear-termobjectiveof33%female
representation in senior management by the end of
2025.Whenlookingatourleadershippipeline,the
picture is also encouraging: our graduate programme
hasafemalerepresentationof55%amongstactive
membersoftheprogramme.
»
See page 43 for more details on our
Vision2030 gender diversity performance.
It takes time to make meaningful change, particularly in
amanufacturingindustrylikeours,wherewomenhave
beenhistoricallyunderrepresented.AtSynthomer,just
9%ofourmanufacturingteamisfemale.Wewanttodo
moretoshiftthatfigure,andin2024weranpilotfocus
groupsattwoofoursitesinFrance.HostedbyAna
PerroniLaloe,ourDE&Iexecutivesponsor,andour
HRVicePresidentforCCSandEMEA,thesessions
gavefemalemembersofouroperationalteamsan
opportunitytosharetheirexperiences,viewsonwhat
workswellatSynthomerandideasforchange.Weare
aiming to hold similar sessions in other parts of the
worldoverthenextyear,usingwhatweheartodrawup
anactionplan.
Helping our people do the right thing
We expect everyone who works with and for Synthomer
to act with integrity and respect – as enshrined in our
values. Our Code of Conduct applies to everyone at
Synthomer, and in 2024 we updated it to ensure it
remains fit for purpose. Those updates include
providing more detailed guidance for employees in
areas like accepting gifts and hospitality. Over the
coming year we will run a series of regional Code of
Conduct roadshows to communicate the changes.
Training on our Code is mandatory and we monitor
participation closely.
We also continue to build our Human Rights Working
Group, with representatives from all our main regions.
This year the Group has reassessed the risk of modern
slavery in our operations, using publicly available data
to help identify our highest-risk locations. We are now
working with those sites to raise awareness and ensure
we have robust mitigation measures in place.
Our full Code of Conduct is available on our website,
along with our Group policies and Sustainability
insights, including:
Workers in the value chain
Business Conduct.
Synthomer plc Annual Report 202438
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Reviewoftheyear / Peopleinfocuscontinued
Deepening our approach to leadership
development
Oneofthebestwaysthatwecanhelpmoreemployees
feel connected to Synthomer’s strategic goals is by
making sure our leaders have the right skills to manage,
guideandcommunicatewiththeirteams.
We continued to develop our Leadership Essentials
series of videos and e-learning modules and virtual
classes–availabletoallleaders–withinclusive
leadership, managing change and developing teams
beingkeyareasoffocusthisyear.
We also made progress in our targeted leadership
developmentprogrammes–OperationsSupervisor
DevelopmentandEmergingLeaderprogramme.
Co-developedwithourmanufacturingorganisation,
wepilotedourOperationsSupervisorDevelopment
programme in all three regions in 2024 and intend to
rollitoutfurtherin2025.Wealsoalignedour12-month
EmergingLeaderprogrammeacrossallregions.This
yeartherewere55participants.
Wearenowdevelopinganewprogrammeforourfuture
seniorleaderscalledAspire,akeypeoplepriorityfor2025.
These activities are all part of our internal Leadership
Academy,whichisitselfpartofournewlylaunched
SynthomerUniversity.Wecontinuetobuildotherparts
of the University, including our Sustainability Academy
andProcurementAcademy,whichfocusonhelpingour
people develop the technical skills that are relevant for
theirjobs.
Looking ahead
WhileourapproachinkeyareaslikeDE&Iand
recognitionwillcontinuetomature,oneofourmain
areasoffocusinthenext12monthswillbemakingsure
weaddressfeedbackfromourlatestYourVoicesurvey.
Wewillalsocontinueworktorolloutourdevelopment
programmestoabroaderaudienceacrossSynthomer.
We are guided by five core values and
associatedbehaviours that we all share
SHE
Integ r i ty
Teamw o rk
Innovatio n
Accounta b i lit y
Ourvaluesweredevelopedbasedonfeedbackfromour
employees, and represent the key expectations of
everyoneinSynthomer.
Synthomer plc Annual Report 202439
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Reviewoftheyear / Peopleinfocuscontinued
Our approach to managing
healthandsafety
All our sites must align their processes and policies
with our Group-wide Safety, Health and Environment
Management System (SHEMS). Find out more at
Synthomer.com
Health and safety: another good year
foroccupational safety
Keeping our people and contractors safe is our highest
priority,andisenshrinedinourcoreSHEvalue,which
statesthat‘wealwayshavetimetoworksafely’.
Our 2024 health and safety performance
Forthesecondconsecutiveyear,weachievedan
historiclowinourrecordableinjurycaserateof0.14.
Thisisagreatachievement,onethatrequirescontinual
focusanddiligencefromallourteams.
Ourprocesssafetyeventrate,at0.21,includes
considerablevariationbetweendivisionsandreflects
themixofchemistriesandfacilitieswenowhaveinour
portfolio.Westillhaveworktodoatourmostrecently
acquiredsitestoacceleratetheirimprovement.
»
See also page 43 for details on our Vision
2030 health and safety performance.
Continuing our focus on process safety
Improving our process safety performance remains
challenging,particularlyatournewersites.Sowe
continue to strengthen our site systems and focus
on‘leading’indicators,suchaspermittowork,while
encouragingnear-missandweak-signalreporting.
Inaddition,wemakefulluseoftraditionalmeasures,
suchasincidentreportingandlearningfromboth
internalandexternalincidents.
Ournew‘bowtie’barrierinitiativehasnowcompleted
checkson10%ofouridentifiedbarriersaspartofour
majoraccidenthazardpreventionprogramme.Our
ongoinganalysisshowsthatwhiletheappropriate
barriers are in place, some could be strengthened and
wehavesharedimportantlessonswithourothersites.
Sharing knowledge to keep improving
We used this year’s annual regional SHE conferences
toinviteleaderstosharetheirpersonalexperiencesof
respondingtoanincidentattheirsite,includingwhatit
meantforthemandhowtheydealtwiththenecessary
follow-upimprovements.Andweintroducednew
processsafetywebinarsasadirectresultoffeedback
fromour2023conferences.
We have continued to roll out our competency
assuranceprocesstoensurewehaveconsistenthealth
andsafetyknowledgeandskillsacrossthebusiness,
andprovidedprocesssafetytrainingatournewersites
andfornewemployees.
Our safety performance by division
Full year ended 31 December 2024 2023
Recordable injury case rate (RCR)
per 100,000 hours for employees
and contractors
CCS 0.25 0.23
AS 0.00 0.38
HPPM 0.09 0.03
Continuing Group 0.14 0.16
Process safety event rate (PSER)
per100,000 hours for employees
and contractors
CCS 0.15 0.13
AS 0.69 0.63
HPPM 0.09 0.08
Continuing Group 0.21 0.18
Priorities for 2025
Whilewestillhaveworktodo,ourlonger-termSHE
trends continue to demonstrate that the longer sites are
part of Synthomer and our SHE management system,
the better their performance, though this year’s PSER
doesshowasmallincreaseyear-on-year.Ourfunctional
SHEexpertswillcontinuetosupportournewersitesto
help them accelerate their SHE improvement by fully
adopting strong systems and by learning from others
acrosstheCompany.
Synthomer plc Annual Report 202440
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Reviewoftheyear
Our Vision 2030 progress
Our Vision 2030 roadmap lays out a series of
sustainability-related targets in areas that matter
most to our stakeholders and where we can have
themost material impact.
Wekeepourtargetsunderreviewandupdatethem
whenneeded.Thisyear,weconductedourfirst‘double’
materialityassessment(DMA).Themajorityofour
Vision2030targetscorrespondwiththemostmaterial
impacts,risksandopportunitiesidentifiedbytheDMA
(see page 30).
WearenowworkingtofullyalignourVision2030
targetswiththematerialtopicsthatrelatetoourDMA,
andassessingandfinalisingourKPIsandanypotential
changestoourVision2030roadmap.Onetarget,‘Our
communities’, did not reach the materiality threshold
andwehavedecidedtoremoveitfromourVision2030
reportingfromthisyear.
Nonetheless, the Synthomer Foundation continues its
greatworktosupportlocalcommunitiesintheUSA
(seeSynthomerFoundationonourwebsite) and our
internalglobalvolunteeringnetworkisgrowing.
We provide more detail online on each of our target
areas, including our approach, governance, progress
andpriorities.Thisinformationisorganisedintothree
areas–environment,peopleandgovernance–andcan
be found on our website.Thisinformationincludes
moredetailonourcommunityprogramme.
Metorexceededtarget.
Sustainable products
Vision 2030 target
At least 60% of new products with enhanced sustainability benefits.
Target 60%
2024 69%
2023 64%
2022 50%
Short-term 2025 objective*
Atleast55%ofnewproductswithsustainabilitybenefits.
Progress against the target and objective in 2024
Thisyearwelaunched38newproductswithenhanced
sustainabilitybenefits,meaningweexceededour2030target
forthesecondconsecutiveyear.
Aswellasintroducingnewproductswithalowercarbonfootprint,
oneofthebestwayswecanreachourtargetisbyeliminating
substancesofconcern.In2024,wemetourcommitmentto
completelyeliminateanemulsifierusedinfibrebonding
binderscalledalkylphenolethoxylatesfromourglobal
productionprocesses.
We continue to evolve our product sustainability scorecard to
ensurewearedesigningnewproductswithsustainabilityinmind,
whilesustainabilitynowrepresents25%oftheweightinginour
strategicscorecard.
Strategy
»
See Innovation in focus on pages 34 to 35.
Sustainable procurement
Vision 2030 target
80% procurement spend with a sustainability rating.
Target 80%
2024 53%
2023 46%
2022** 37%
Short-term 2025 objectives*
• •
50%procurementspendcoveredbyasustainability
ratingandimprovementplan
• •
Audit eight key suppliers’ sites by 2025
• •
Ensure that all our highest-risk suppliers agree to our
SupplierCodeofConductorequivalentstandards
Progress against the target and objective in 2024
Weachievedourshort-termobjectivetohave50%ofourspend
coveredbyasustainabilityrating.
UsingtheTfSauditmethodologywehaveidentifiedsuppliersthat
wewanttoworkwithtobetterunderstandtheirapproachtokey
sustainabilitytopics.Thisyearweauditedeightsites,witha
particularfocusonhumanrights.Weidentifiedthemessuchas
keepingrecordsonworkinghoursandmanagingbreaks,andour
suppliersarenowworkingtoimproveintheseareas.
Wecontinuetoreviewoursupplychainriskandstrengthenourdue
diligencetoolsandmethodologies.
Our training this year has helped the procurement team improve its
understandingofsustainability-certifiedmaterials,suchasISCC
PLUS,andhowtorequestandvalidatesustainabilitydatafromour
suppliers.Wealsorantrainingonhumanrightsandmodernslavery.
Todate,93%ofourhighest-risksuppliershaveagreedtomeetour
SupplierCodeofConductorequivalentstandards.
Strategy
»
See Sustainability in focus on pages 26 to 31.
* Setin2020,excludinghealthandsafetyobjectives,
whichareresetonanannualbasis.
** ExcludesadhesiveresinsbusinessacquiredinApril2022.
Link to strategy
Organicgrowthinattractiveendmarkets
Rigorous and consistent portfolio management
tobuildfocused,leadingpositions
Operationalandcommercialexcellenceinhowwerun
ourbusiness
Differentiatedsteeringinhowweallocatecapitalandtalent
Diversity,equityandinclusion,andholistic
peopledevelopment
Synthomer plc Annual Report 202441
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Reviewoftheyear / OurVision2030progresscontinued
Environment
Vision 2030 target
Reduce Scope 1 and 2 absolute emissions by 47%.
Target 47%
2024 45%
2023 41%
2022 36%
Short-term 2025 objective*
• •
30%absolutereductioninScope1and2emissions(versus2019)
• •
5%energyreductiononintensity(versus2022)
Progress against the target and objective in 2024
OurScope1and2emissionsreducedthisyearby7.2%,anoverall
reductionof44.9%comparedtoour2019baseline.OurScope1
emissionsincreased4%versus2023.Thiswasmainlyduetoan
increase in reported process emissions from monomer production
atoursiteintheCzechRepublic.Additionalemissionswerealso
due to the rise in energy demand corresponding to increased
salesvolumes.
Wecontinuetoworkonenergyandprocessefficiencyprojectsto
tackle these emissions through our Manufacturing Excellence
programme.Forexample,oursiteinMiddelburg,theNetherlands,
hassavedanestimated3ktofcarbondioxideequivalent(CO
2
e).
InMarl,Germany,weimprovedenergyefficiencybyaround6%
throughprocesschangesandrecipeoptimisation.Wearenow
sharingsomeofMarl’sapproacheswithothersites.
While our energy intensity (versus our 2022 baseline) is behind
target,wedidseea3.5%improvementcomparedto2023.
OurScope2emissionswere32%lowerthan2023,dueprimarilyto
the supplier of steam to the Marl site in Germany closing its last
coal-firedproductionunit.
Otherprojects,suchasreplacingandupgradingdryingtechnology
atoneofoursitesintheUSA,optimisingourwastegassystemat
our Pasir Gudang site in Malaysia and evaluating opportunities to
introduceheatpumpsatcertainsites,willallplayanimportantpart
inhelpingusreachour2030goals.
»
See Sustainability in focus on pages 26 to 31,
ourClimate Transition Action Plan on page 29 and
ourClimate action insight paper at Synthomer.com.
See our Environmental performance summary on
pages191 to 194 for datadisclosures.
Vision 2030 target
Reduce Scope 3¹ absolute emissions by 28%.
Target 28%
2024 22%
2023 14%
2022 18%
Progress against the target and objective in 2024
Our Scope 3 emissions are similar to last year based on our
productionvolumes.
As explained on pages 27 to 29, our 2023 carbon assessment has
informed our understanding of our Scope 3 emissions, particularly
therawmaterialswebuy,andwherewebuythemfrom.Thatwork
has in turn informed our carbon transition action plan (page 29).
Andweexpecttheactionswetookin2024toreduceour
Group-levelScope3emissionsby2%.
Vision 2030 target
80% of electricity from renewable sources.
Target 80%
2024 80%
2023 80%
2022 80%
Progress against the target and objective in 2024
Wemetourtargettosource80%ofourelectricity(asaGroup)from
renewablesourcesforthefourthyearinarow.Thiswasduetoa
combinationofgreentariffs,purchasingenergyattributecertificates
(EACs)andsomesmalleronsiterenewablepowergeneration.
Because of the likely changes in our manufacturing footprint in the
comingyears,wehaverevisedourintentiontosignaEuropean
virtualpowerpurchaseagreementduetothevolumecommitment
thatwouldbeneededandwearenowreviewingotheroptions,such
asjoiningaconsortiumthataggregatesourdemandwithothers.
Also,from2025,wehaveupdatedourrenewableelectricity
procurementpolicytoincludetherequirementthatwhenwerenew
supplyagreementswewillonlyusegreentariffs(whereavailable)
andwillpurchaseEACssothateachofoursitesusesatleast80%
renewableelectricityasaminimum(notjusttheGroup).
Wearealsoassessingthepotentialtimingforintroducinga100%
renewableelectricitytarget.
Vision 2030 target
Establish sustainable water management at sites located in
areasof high water stress.
Progress against the target and objective in 2024
Ourwaterintensitymetricshaveimprovedthisyear,withwater
withdrawalintensity2.2%betterthan2023.
Ourthreesiteswithhighbaselinewaterstressand/orhighforecast
waterstresshavemadeprogressagainsttheirwaterstewardship
targets.OursiteinRibecourt,France,hasmetitslegallybinding
10%reductiontargetandhasaclearsetofobjectivestohitits25%
reductiontargetby2035.OurLeHavre,Francesitehasworkedwith
a third-party expert to develop and submit an action plan to its
regulator,settingoutproposalstomeeta20%reductiontarget.
OursiteinLangelsheim,Germany,hascontinuedworktoconsider
eliminatingonce-throughcoolingusingriverwater,whichwe
estimatecouldreduceoverallGroupwaterwithdrawalby12%when
complete.Ithasalsomadefurtherprogresstowardsimplementing
theAllianceforWaterStewardship(AWS)standardwithaviewto
seekingcertificationin2025.
Short-term 2025 waste objective*
5%reductionintotalwastepertonne(versus2022).
Progress against the target and objective in 2024
Ourtargetedthree-yearrollingwasteintensitymetricwas6.7%
worseoverthe2022-2024periodversus2020-2022.
Likeemissionsandwater,manyofoursitesareworkingonprojects
toimprovetheefficiencyofourmanufacturingprocesses,which
canbeacommoncauseofwaste.Forexample,ourJefferson,USA,
siteoptimiseditshazardouswastestreammanagement,saving
morethan$1.2mindisposalcostsandreducinghazardouswaste
bymorethan1,000t.
Ourtotalwastefigureswereaffectedbyone-offwastedisposals
relatingtonon-processwaste(includingmorethan1,000tof
demolition-relatedwasteatoneofourGermansites),asshownin
the environmental performance summary table on page 193.Asa
result,ouroverallwastegenerationin2024was1.9%uponlast
year,but18%lowerthan2022.
Strategy
»
See Sustainability in focus on pages 26 to 31 and our
Water and Waste and pollution insight papers at
Synthomer.com
Synthomer plc Annual Report 202442
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Reviewoftheyear / OurVision2030progresscontinued
Our employees
Vision 2030 target
40% senior management
2
gender diversity.
Target 40%
2024 29.2%
2023 30.4%
2022 25.4%
Vision 2030 target
Achieve upper quartile engagement scores against
externalbenchmarks.
Short-term 2025 objectives*
• •
33%femaleseniorleaders
• •
20%seniorleadersfromethnicallydiversebackgrounds
Progress against the target and objective in 2024
Despitetheslightdeclineversuslastyear,weremainconfident
aboutmeetingournear-termobjectiveof33%female
representationinseniormanagementbytheendof2025–always
groundedonourunderlyingprincipleofmeritocracy.
Wefinditparticularlyencouragingtoseeouroverallfemale
representationacrosstheworkforceremainingonanupwardtrend
with23.4%versus22.8%theyearbefore.
Wewanttoencouragemorewomentotakeupmanufacturing
careers–wheretheyhavetraditionallybeenunderrepresentedboth
inSynthomerandacrossthechemicalsindustry.Thisyear,weheld
pilotfocusgroupswithfemalemembersofouroperationsattwoof
our sites, giving them the opportunity to share their experiences
andideasforchange.Weareaimingtoholdsimilarsessionsin
otherpartsoftheworldoverthenextyear,usingwhatwehearto
drawupanactionplan.
Ourethnicdiversityacrossseniormanagementwasat20.8%
for2024.
Weconductedourglobalemployeeengagementsurvey–YourVoice
–inNovember2024,with80%ofemployeessharingtheirviews.
Thiswas7%higherthanthelastsurveyweranin2021.Weachieved
anoverallengagementscoreof7.0outof10,whichpositionsusin
the middle of our chosen external benchmark and represents an
improvementonour2021performance.Thisisagoodresultgiven
howmuchinternalchangeandexternalturbulenceouremployees
havehadtonavigateinrecentyears.
Once again, it is encouraging to see positive responses in areas
suchassafety,ethicsandcompliance.Employeesalsosharedtheir
thoughts on areas for improvement, including strengthening our
approach to career development and providing more support in
timesoftransitionandchange.
Our Board continues to hear directly from employees via our
EmployeeVoiceprogramme.Thisyear,theBoardparticipatedin11
face-to-faceandvirtualsessionsacrossourthreemainregions.
Strategy
»
See Our strategy on page 3, People in focus on pages
36 to 39.
Health and safety
Vision 2030 target
Recordable injury case rate (RCR).***
Target 0.20
2024 0.14
2023 0.16
2022 0.34
Vision 2030 target
Process safety event rate (PSER).***
Target 0.10
2024 0.21
2023 0.18
2022 0.22
Short-term 2025 objectives*
• •
RCRof0.20
• •
PSERof0.20
Progress against the target and objective in 2024
WeachievedanotherhistoriclowinourRCR.Thisisagreatachievement,
onethatrequirescontinualfocusanddiligencefromallourteams.
OurPSERincludesconsiderablevariationbetweendivisionsand
reflectsthemixofchemistriesandfacilitieswenowhaveinour
portfolio.Wecontinuetohaveworktodoatourmostrecently
acquiredsitestoacceleratetheirimprovement.
These lagging indicators are important for tracking our overall
performancebutdonotalwaystellthefullstory.Somesiteshave
outstandingrecords,suchasUruapan,Mexico,whichrecently
celebrated10yearswithoutarecordableinjuryormajorprocess
safetyevent.Meanwhile,ourAdhesiveSolutionssiteinMiddelburg,
TheNetherlands,hascompletedafullyearwithoutarecordable
injuryforthefirsttimesince2017.
Processsafetyhasremainedaprioritythroughout2024,andwe
conductedaround10%ofour‘bowtie’barrierchecksaspartofour
ongoingmajoraccidenthazardpreventionprogramme.Wealso
carriedoutSHEauditsat10sitestoassessthewaytheycontinue
topreventpotentialmajoraccidenthazards,includinghowthey
managecontractors,afterwenoticedacorrelationbetween
contractoreventsandnear-missincidents.
Strategy
»
See Sustainability in focus on pages 26 to 31, People in
focus on page 40 and our Our health and safety insight
paper at Synthomer.com
* Setin2020,excludinghealthandsafetyobjectives,
whichareresetonanannualbasis.
** ExcludesadhesiveresinsbusinessacquiredinApril2022.
*** Per100,000hoursforemployeesandcontractors.
1 SBTi-approved Scope 3 science-based target is for Category 1: Purchased
GoodsandServices.
2 SeniormanagementisdefinedasmembersoftheExecutiveCommittee
plusseniormanagersdirectlyreportingtothem.
Synthomer plc Annual Report 202443
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Reviewoftheyear
Managing risk
We continue to adapt our risk management
framework to protect our business, pursue
ourstrategic objectives and keep pace with
thebroader environment.
Thatenvironmentisevermorecomplex,withincreasing
geopoliticaluncertainty,extremeweathereventsand
technologicaladvancements,whichallprovide
challengesandopportunitiestoourbusiness.
Thisheatmapshowstherelativepositioningofour
principalrisksbasedonthethreedimensionsweuseto
assess our risks: the likelihood of the risk materialising,
itspotentialimpactanditsvelocity–thetimebetween
theriskcrystallisingandtheimpactbeingfelt.Thisis
basedonourresidual(net)ratingsofrisksafterwehave
consideredanymitigatingcontrols.Riskswithahigh
velocityareshownwitharedoutline,whilemovements
inprincipalriskscomparedtolastyearareshownas
greydottedlines.
Find out more about our principal risks, our mitigation
activities and the rationale for movements in principal
risks on pages 49 to 56.
Principal risk Change Page
1 Delivery of our
strategic initiatives
<>
49
2 Demand uncertainty and
competitivedynamics
+
50
3 Technology
and innovation
<>
51
4 Disruption in supply
toourcustomers
<>
52
5 Process safety
<>
53
6 IT and cyber security
+
53
7 Energy price risk in Europe
<>
54
8 Ethics and compliance
<>
55
9 Financial markets
andbalancesheet
—
56
Key
Strategic risk
Operational risk
Compliance risk
Financial risk
Higher velocity
+
Increased
<>
No change
—
Reduced
Impact
Likelihood
Synthomer plc Annual Report 202444
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Reviewoftheyear / Managingriskcontinued
We use leading risk management techniques
tohelp us make good decisions about business
opportunities while protecting our sites, systems,
employees and other key stakeholders.
This is underpinned by an enterprise risk management
frameworkthathelpsustotrackandreportrisksand
theassociatedactionswearetakingtomanageour
riskexposure.
Our Board
The Board is responsible overall for ensuring that risk is
effectively managed across the Group and for creating
theframeworkforourriskmanagementtooperate
effectively.TheBoardcontinuestosetourriskculture
and the risk appetite it is prepared to accept to achieve
theGroup’sobjectives,recognisingthattheseunderpin
theeffectivenessofourriskmanagementframework.
We also recognise that the chemical manufacturing
industry is inherently dangerous and that our business
facesmanyrisks.Forprincipalrisks,weconsiderthe
risk appetite under three categories: risk averse, risk
neutralandrisktaking.Forexample,weputprocess
safety in the risk-averse category because safety is
oneofourcorevalues.Thatmeanswearenotwilling
toacceptrisksofthissortandthatanyprocesssafety
risksmustbereducedasfarasreasonablypractical.In
therisk-takingcategory,however,weputtechnologyand
innovation.Theseenableustodeliverourstrategy,so
wearemorewillingtoaccepthighervolatilityonreturns
inthisarea.Ourriskappetitestatementsareembedded
inourenterpriseriskmanagementframework.
Aspartofourgovernanceprocessin2025wewill
conductadetailedreviewandrefreshofourrisk
appetite statements for our principal risks, to make sure
theycontinuetoreflectSynthomer’sstrategicfocus.
Howwemanagerisk
Risk governance and oversight
Risk and
assurance
Establishes the
riskmanagement
framework
Provides guidance
andchallengeto
divisionalandfunctional
riskowners
Aggregates risk
informationandhelps
management to identify
principal risks
Top-down Risk assessment
Board of Directors
Setstheriskcultureandriskappetite.
Hasoverallresponsibilityforreviewing
andapprovingourprincipalrisks.
Audit Committee
Supports the Board to monitor
riskexposure.Reviewsprincipal
andemergingrisksandthe
effectiveness of risk management
andinternalcontrolprocesses.
Provides challenge to senior
managementwhereappropriate.
Executive team/
Executive Risk Committee
Reports on principal and emerging
riskstotheAuditCommitteeand
Board.Conductstop-downrisk
identificationandreview.Ensuresrisk
managementpolicyisimplemented
and embedded in the business and
appropriate responses are taken to
managerisks.
Division and function
riskowners
Responsibleforriskidentification,
managementandcontrolswithintheir
divisionandfunction.Identifyand
assess risks, determine and monitor
riskresponses,andensureoperating
effectiveness of key controls and
progressofactionstomanagerisk.
Bottom-up Risk assessment – Divisions and functions
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Reviewoftheyear / Managingriskcontinued
Audit Committee
OntheBoard’sbehalf,theAuditCommitteereviews
andassessestheeffectivenessoftheGroup’srisk
managementframework.TheAuditCommitteeand
BoardalsoreviewtheExecutiveRiskCommittee’s
assessment of principal and emerging risks and
providechallengewhereappropriate.
This year, the Audit Committee received regular
updatesonfinancialandnon-financialriskmatters,
suchascomplianceandfinancialcontrols,and
summariesoftheworkdonebytheInternalAudit
function,whichoperatesarisk-basedauditplan,and
haddiscussionswiththeexternalauditors.Together,
ourriskmanagementframeworkandassociated
reviewsaredesignedtomanageriskwithinourrisk
appetite,ratherthantoeliminateriskcompletely.
Executive Committee
The Executive Committee is responsible for identifying
and managing our strategic, operational, compliance and
financialrisksusingtheriskmanagementframework.
Italsomakessureourriskmanagementpolicyand
cultureisimplementedandembeddedinthebusiness.
Executive Risk Committee
Our Executive Risk Committee (ERC), chaired by the
CFO, is responsible for:
• •
Conductingtop-downriskassessmentsandreviews
• •
Maintaininganoverviewofthekeyrisksidentified
across the Group
• •
Assessing and reporting on principal and emerging
riskstotheAuditCommitteeandBoard.
TwiceayeartheERCconductsbottom-upandtop-down
reviewsofourprincipalrisksandassessesemerging
risksthatcouldthreatenthedeliveryofourstrategy.The
ERCalsotakesakeyroleinassessingourrisklandscape.
This year, the ERC took part in a cyber incident response
simulation exercise led by our Vice President, Information
Technology, supported by an expert partner, to better
understandtherisksofandrequiredresponsetoacyber
attack.Thisexerciseidentifiedareaswherewecan
enhance our business continuity plans and improve our
communicationsifanoutagehappens–changeswe
willimplementin2025.
Division and function risk owners
Wehaveastructuredriskmanagementframework
thatoperatesatdivisionandGroupfunctionlevel.
Weuseastandardmethodologytoquantifyrisk,with
ariskassessmentmatrixtoassessrisksconsistently.
The risk matrix looks at three risk dimensions:
• •
The likelihood of the risk materialising
• •
Its potential impact
• •
Itsvelocity–thetimebetweentheriskcrystallising
anditsimpactbeingfelt.
Ourdivisionsandfunctionsconducttheirownbottom-up
risk assessments and record them in a risk register using
theGroup’sstandardriskmanagementmethodology.
They assess risks at both an inherent (gross) level and
aresidual(net)level,consideringthemitigatingcontrols
thatareinplace.Riskownersalsoidentifyanyadditional
activitiesthatcouldmitigatetheriskinlinewithour
riskappetite,acceptingthatsomelevelofrisktaking
isnecessary.
Three lines of defence
We operate a ‘three lines of defence’ assurance model.
Line 1
Our operational management and
employees form our first line of
defence, responsible for identifying
and managing day-to-day risk in
theirown areas. They are guided
byGroup policies, procedures and
control frameworks.
Line 2
Our second line of defence includes
our Group Risk function, which
develops and manages the risk
management framework and
engages with management to
identify, agree and update risk
information. This line also includes
other compliance and assurance
functions – for example, Group SHE,
Regulatory Affairs, Compliance
andISO audits – which review how
effective the mitigating actions
andcontrols are.
Line 3
Our Internal Audit function provides
our third line of defence. It provides
independent assurance on internal
controls. Ourstatutory auditors
provide external assurance on
thefinancial statements, while
anexternal specialist provides
assurance around ISO standards.
Synthomer plc Annual Report 202446
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Reviewoftheyear / Managingriskcontinued
UK Corporate Governance Code 2024
InJanuary2024,theFinancialReportingCouncil
published a revised version of the UK Corporate
GovernanceCode.Wehaveevaluatedhowthe
revisionstotheCodewillaffectourriskmanagement
arrangements,specificallythekeychangesrelatingto
Provision29.ThisprovisionrequirestheBoardtomake
adeclarationoftheeffectivenessoftheGroup’smaterial
controls–includingfinancial,operational,reportingand
compliancecontrols–intheAnnualReportatthe
balancesheetdate.
Whilewebelieveourexistingriskmanagementprocesses
arewellplacedtomeetthenewrequirements,weare
usingtheopportunitytoassessandenhance,where
required,thematurityofourriskandinternalcontrols
processes.ThenewCodewillapplytotheGroupforits
financialyear2025,exceptforProvision29,whichwill
applyforfinancialyear2026.
Assessing our principal risks
Risksaffectusinmanyways.ThedivisionsandGroup
functionssubmitformalriskassessmentstwiceayear,
whichhelpustoidentifythelikelihood,potentialimpact
andvelocityofrisksacrossthebusiness.Management
isalsoempoweredandencouragedtomanageand
react to risks as part of normal day-to-day decision
making.Together,theseassessmentsandourthree
linesofdefencemeanwecanestablisheffective
controlstomanageourrisks.
Our key risk categories
Wecategoriseourrisks–andconsiderhoweffective
ourmitigatingactionsandcontrolsare–infourareas:
• •
Strategic risks that could prevent us achieving our
strategicobjectives
• •
Operational risks that, if not successfully managed,
wouldthreatenourviability–theserelatetoour
ability to operate a sustainable and safe business
• •
Compliancerisks,whereabreachofregulations
orlawscouldleadtofinesfromregulatorsorto
reputationalharm,whichmaydisproportionatelyaffect
ourstandingintheinvestorandwidercommunity
• •
Financial risks relating to the Group’s funding
andfiscalsecurity.
The Board has conducted a robust assessment of the
Company’s emerging and principal risks as part of our
integratedriskmanagementframeworkandtheERC
alsocontinueditsworkthisyear.Thisworkremains
particularly relevant, given market conditions and the
macroeconomicandgeopoliticalenvironment.TheERC
concluded that our key risk categories remain relevant
andmadenochangestotheprincipalrisks.TheBoard
reviewedandendorsedtheseconclusions.
We outline our principal risks and uncertainties in detail
on pages 49 to 56.OurBoardandmanagementfeel
these risks pose the greatest threats to our business and
fall into categories that relate closely to our strategic
objectivesandbusinessmodel.Theriskslistedarenot
inanypriorityorder,norarealltheriskswefacelisted.
Thenatureofriskchangesovertime,withnewrisks
emergingandtheeffectofotherschanging.Ourrisk
management and assurance programme can only provide
reasonable, not absolute, assurance that key risks are
managedtoanacceptablelevel.Thisiswhywecannot
provideabsoluteassuranceagainstmisstatementorloss.
Risk movement
Ourriskframeworkhelpsusidentifytheprincipalrisks
weface,anditallowsustomonitorthepotentialimpact
and likelihood of a risk occurring, and its velocity should
theriskcrystallise.Theimpactandlikelihoodofthese
principalriskscanfluctuatedependingonarangeof
internalandexternalfactors.
Having assessed our principal risks and uncertainties,
weconcludedthatthreeofournineprincipalriskshave
eitherincreasedorreduced.TheBoardhavereviewed
andendorsedtheseconclusionsasfollows:
• •
Demanduncertaintyandcompetitivedynamics–the
likelihoodhasincreased,becauseweareoperatingin
an increasingly uncertain geopolitical environment
• •
ITandcybersecurity–theimpacthasincreased,so
whileoureffortsmeanwearemorepreparedand
resilient,wearefacinganincreasinglychallenging
threat landscape
• •
Financialmarketsandbalancesheet–theimpact
has decreased, because of our improved debt
maturityprofile.
Synthomer plc Annual Report 202447
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Reviewoftheyear / Managingriskcontinued
Climate change
Werecognisethesignificantriskposedbyclimate
change–itremainsintegraltoourriskmanagement
processes and a core element of a number of our
principalrisks.Havingthoroughlyreviewedclimate-
relatedrisksandopportunities,inlinewithourapproach
lastyear,webelieveclimate-relatedriskisbest
managedwithinourprincipalrisks,ratherthan
separatelyasastandaloneprincipalrisk.Wewill
continuetoreviewandassessthisapproachin2025.
Integrating climate-related risks into our principal risks
meansweconsidertransitionalrisks–primarilythe
potential effects of carbon taxes, market changes and
environmentalpolicychanges–andphysicalrisks–
primarily the potential effects of hurricanes, droughts,
flooding,risesinsealevelandextremetemperatures–
inallaspectsofourbusinessoperations.Werecognise
the ability of climate change to particularly affect the
principalriskswefacearound:
• •
Delivery of our strategic initiatives
• •
Demand uncertainty and competitive dynamics
• •
Technology and innovation
• •
Disruption in supply to our customers
• •
Energy price risk in Europe
• •
Ethicsandcompliance.
In2024,wecontinuedtodevelopourapproachto
climate-related risk reporting, to make sure our risk
managementframeworksupportsourstrategyand
addressesallrelevantstatutoryrequirements.Those
requirementsnowincludethoseoftheFinancial
ConductAuthority,whicharealignedwiththe
recommendations of the Task Force on Climate-related
FinancialDisclosures.Theyalsoincluderegulatory
requirementsrelatedtoclimatechange,water,
biodiversity,greenwashingandcompanyreporting,
whichincludetheEUCorporateSustainabilityReporting
Directive and IFRS Sustainability Disclosure Standards,
aswellasdevelopmentsaroundtheUKandEUcarbon
borderadjustmentmechanisms.In2025,tocontinue
developing our strategic understanding and mitigation
actions,wewillconductamorecomprehensiveclimate
riskassessmentandscenarioanalysiswithaleading
climateanalyticsfirm.
Ifwefailtoeffectivelyrespondtotheriskofclimate
change,wemaycompromiseourreputationand
strategyforgrowth.Thisiswhywecloselymonitor
itandcontinuetoevaluatewhetheritshouldbe
consideredaprincipalriskinthefuture.
Emerging risks
Wealsoidentifyandanalyseemergingrisks–andthe
needtomitigatethem–aspartofourexistingrisk
managementprocesses.Emergingrisksmayaffect
usinthelongerterm,butwedonotcurrentlyhave
sufficientinformationtounderstandandassessthe
likelyscale,impactorvelocityoftherisk–ortodefine
anappropriateriskresponse.
ThroughtheERC,AuditCommitteeandBoard,we
continue to embed and discuss emerging risks as
partofourriskprogramme,tomakesuretheyare
appropriately considered and monitored and to evaluate
theeffecttheywouldhave,includingonourprincipal
risks.Insomecases,emergingrisksaresupersededby
otherrisksorstopbeingrelevantastheenvironmentwe
operateinchanges.
We are currently monitoring a number of emerging risks,
including:
• •
Artificialintelligence(AI)–AIisdevelopingrapidly,
andweseeitasbothanopportunityandariskto
ourbusiness.Forexample,AIcouldhaveadvantages
in novel chemical formulation and could enhance
productivitybyautomatingcertainrepetitivetasks.
However,weareawareitcouldposeariskif
technicalcontrolsarenotsufficientorifour
competitorsuseAItotheiradvantage.Wewill
continuetomonitorAI’susesowecanevaluate
whethertoconsideritaprincipalriskinthefuture.
• •
Regulatorychange–includingthoseregulations
relating to UK corporate governance and
sustainabilitydisclosures.
• •
Geopoliticaluncertainty–includingongoing
interstateconflicts,andchangesthatmayaffect
internationaltradingactivity,suchasnewsanctions
orchangesintariffpolicies.
Synthomer plc Annual Report 202448
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Reviewoftheyear
Principal risks and uncertainties
Here we outline the most significant risks to our business. Other, lower-level risks could also affect
theGroup’s performance, and these are actively managed through our risk management framework.
Strategic risks
See page 56 for key to strategy icons
Delivery of our strategic initiatives
Risk owners JanChalmovsky,President,StrategyandM&A;AnantPrakash,InterimChiefHumanResourcesOfficer
Link to strategy
Movement
<>
No change
Description 2024 response 2025 plans
Deliveringourstrategicinitiativesrequiresabroad
rangeofactivitiesacrosstheGroup,eachinvolvinga
varietyofrisksthatwemonitorthroughouroverallrisk
managementframework.
Anengagedworkforceisakeyfactorinthrivingasan
organisation.Thechallengesoftalentattraction,employee
retentionandworkforceengagementremainsignificantrisksto
deliveringourstrategy.Thisisparticularlyrelevantnow,when
the chemical manufacturing industry is undergoing profound
transformationandtalentmarketsremaincompetitive.
• •
We have continued to deliver on our portfolio strategy, including
divesting our Compounds business, and allocating capital and
talentinlinewithourstrategy.
• •
As part of our strategy to attract, retain and develop people
andtalent,we:
– RanaGroup-wideemployeeengagementsurvey,withan80%
responserate.Thishelpsusbuildonexistingstrengthsand
addressareasforimprovement,aswefocusonbeingagreat
placetowork
– Launchedanewglobalrecognitionframeworktostrengthen
employee engagement
– Introducedrecruitingguidelinesandknowledgehubsto
continuetomatureourtalentacquisitioncapability
– Developedanewtalent‘healthcheck’tohelpbusinessesand
functionsmovefromannualtalentreviewstoregulartalent
check-ins
– Continued to develop leadership capabilities through targeted
leadershipprogrammes,andintroducedanewLeadership
Essentials series
– Continuedtowardsour2030ambitionsthroughouremployee
resource groups, focusing on gender and ethnic diversity, and
onimplementingmoreregionalDE&Iambassadornetworks
and mentoring
– With the Commercial Excellence team, began the
Sustainability Academy in our Coatings business, delivering
foundation-levelandrole-specifictrainingtohelpcolleagues
engagetheirstakeholderswithgreaterfluencyandconfidence
onsustainabilitytopics.
• •
Wewillcontinuetodeliveronourportfoliostrategyand
driveourstrategicprojects.
• •
As part of our strategy to attract, retain and develop people
andtalent,wewill:
– Turn insights from our 2024 employee engagement survey
intomeaningfulactionsthatimprovepeopleengagement
– Launchanewdevelopmentprogrammetosupportfutureleaders
– Continue to strengthen talent health, performance management,
leadershipcapabilitiesandDE&I–allkeyelementsofemployee
engagement
– Continue to mature our ESG efforts and, under the umbrella of
theSynthomerUniversity,expandthereachofourSustainability
Academy to engage and upskill colleagues across all divisions
andfunctions.
Synthomer plc Annual Report 202449
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Reviewoftheyear / Principalrisksanduncertaintiescontinued
Strategic risks continued
Demand uncertainty and competitive dynamics
Risk owners Divisional presidents
Link to strategy
Movement + Increased, given geopolitical uncertainty
Description 2024 response 2025 plans
Theperformanceofthemarketsweoperateinisfundamental
toourgrowth.Wehaveseenchallengingconditionsinrecent
years,includinghighinflation,givenglobalgeopoliticaland
macroeconomicevents.
Thishasledtoweakeroveralldemandinourendmarkets,
especially in segments for durable end-use products, and
maybeexacerbatedbyincreasedcompetition,withcapacity
expandinginChinaandAsia.
Whileourproductionislargelyin-market–tobeclosetoour
customers–potentialchangesinglobaltermsoftradecould
affectsomesupplychainsorourcompetitivelandscape.
Thesefactors,coupledwithourrelativelyshortorderbooks,
makedemandforecastingveryuncertain,leadingtodownside
andupsiderisk.
• •
Acrossalldivisions,wecontinuedtodevelopend-market
andcustomerintelligencetoidentifythewaystoaddvalueto
ourproducts,includingthroughsustainabilitybenefits,to
influenceinnovationandtogrowmarketshare.
• •
CompletedournewChinaInnovationCentreinShanghai,
enhancingourcapacitytoservecustomersintheregion.
• •
IntheASdivision,we:
– Regained market share by delivering our transformation
programmeinitiatives,focusingoncostsavingsandreliability
improvements,suchasoptimisingsuppliernetworksto
increaseavailabilityofkeyrawmaterials
– Grewspecialityrevenuesthroughinnovationintapesand
labels,salessynergiesandnewsustainabilityofferings.
• •
IntheCCSdivision,we:
– Deliveredourspecialisationstrategy,focusingongrowth
through portfolio mix and value selling
– Investedtoimprovethemanufacturingflexibilityofanumber
ofourmajorfacilitiesintheUSA,enablingustoproduce
additional speciality products in the region
– Debottlenecked a plant in the Middle East, enhancing our
capacityincoatingsintheregion.
• •
IntheHPPMdivision,we:
– Launchedamulti-year,zero-capitaltechnologypartnershipin
the USA domestic glove manufacturing market, leveraging
Health&Protection’sintellectualproperty,technologyand
manufacturing expertise
– FinalisedworktomothballtheKluang,Malaysiasiteandto
transferproductionelsewhere
– Developedandintroducedinnovativenewlatexgrades,
whichmeetglove-manufacturingcustomers’needsandhave
apositivesustainabilityimpact,buildingonourgainsin2023.
• •
InAS,wewill:
– Continue to focus on further cost savings and reliability
improvement
– Focus on expanding and commercialising our innovation pipeline
andoursustainabilityofferings.
• •
InCCS,wewill:
– Focusongrowingourcustomerbaseandnewproductpipelinein
all regions, particularly outside Europe
– LeverageChinagrowthopportunitiesandpartnershipsthrough
ournewChinaInnovationCentre.
• •
InHPPM,wewill:
– ContinueourHealth&ProtectionpartnershipintheUSA,andseek
similaropportunitieselsewhere
– Focus on divesting our non-core, base businesses in Europe,
sowecanfocusonmoreresilientspecialitybusinessin
higher-growthregions.
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Reviewoftheyear / Principalrisksanduncertaintiescontinued
Strategic risks continued
Technology and innovation
Risk owner Robin Harrison, Vice President, Innovation
Link to strategy
Movement
<>
No change
Description 2024 response 2025 plans
Innovationisacriticalenablerforourgrowthstrategy.
Alongside differentiated performance from our products,
ourcustomersandendusersarelookingforimprovements
insustainability–suchasalowercarbonfootprintand
circularity.Thesearealsocriticalenablersforourraw
material(Scope3)decarbonisationprogramme.
Ifwefailtoidentifyopportunitieseffectivelyandimplement
innovation programmes, or keep abreast of developments
inAI/machinelearning,wecouldfailtorealisegrowth
opportunitiesandpotentiallylosemarketshare.
Whenweinnovatesuccessfully,failuretoprotectourIP
couldseeuslosecompetitiveadvantageandvaluefrom
ourinvestments.
• •
Weselectedawell-established,commerciallyavailable
knowledgemanagementsystemfordatacaptureand
management.
• •
Westarteddevelopingnewspecialitycoatingsproductsin
ourCCSdivision,afterpositivefeedbackfromcustomersthat
sampledprototypesofnewpolymersdevelopedthroughour
bio-basedpolymersplatform.
• •
WemadethefirstsalesofFSC-certifiedresintoatyre
customerbasedprimarilyonnon-fossilrawmaterials.
• •
We carried out extensive technology scouting to develop a
databaseoflower-carbon-footprintand/ornon-virginfossil-
basedrawmaterials.Wewillusethisdatabasetohelpintegrate
ourcommercialandinnovationplanning.
• •
We updated our product sustainability scorecard as part of our
strategicscorecardin2024toincorporatecriteriaforlower-
carbon-impactsystemsanddownstreamcustomerbenefits.
Projectsarenowevaluatedusingtheupdatedscorecard.
• •
WesetupanewInnovationTaskforcetomakesurewehavethe
right capabilities and processes for our future needs, including
usingAIandmachinelearningwhereappropriate.Thetaskforce
hasidentifiedthreefocusareasfor2025.
• •
Undertakeaphasedglobalrolloutofournewknowledge
managementsystemfordatacaptureandmanagement.
• •
Continue to develop our bio-based polymers platform, aiming
totrialnewprototypeswithtargetcustomers.
• •
Runathree-yearcollaborativeprogrammewiththeUniversity
ofYorkfromQ32025,aimingtodrivedecarbonisationand
defossilisation of speciality polymers, supported through a UK
GovernmentProsperityPartnershipgrant.
• •
Deliver initiatives from the Innovation Taskforce, including:
– Deployinganewexploratoryinnovationteamtoimprovethe
valueofourinnovationpipeline
– Moreeffectiveprocesses,projectmanagementandgovernance
alignedwithclearinnovationmetrics
– AI/machinelearningpilotactivitiestoassesspotential
improvementsinspeedtomarket.
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Reviewoftheyear / Principalrisksanduncertaintiescontinued
Operational risks
Disruption in supply to our customers
Risk owners Divisional presidents
Link to strategy
Movement
<>
No change
Description 2024 response 2025 plans
Securityofenergy,rawmaterialsupplies,logistics,andplant
availability and reliability are all critical to maintaining supplies
toourcustomers.
These may be affected by external factors, such as market
shortages, climate-related transition risks (including
regulationandtaxes),short-and/orlong-termphysical
climate-relateddisruption(includingweathereventsand
natural disasters), pandemics, global macroeconomic and
geopolitical events, or an internal event that affects plant
availability,reliabilityorsafeoperations.
All these factors could lead to a disruption in supply to our
customers,whichmayadverselyaffectourreputation–
especially given our strategic commitment to operational
andcommercialexcellence.
• •
Wecontinuedtoaddresstherisksassociatedwithrawmaterial
supply by using contract strategies that covered our strategic
rawmaterials–includinglong-termsupplyagreements,where
appropriate.
• •
InourCCSdivision,wecompletedarisk-basedassessmentof
thesecondaryrawmaterialsassociatedwithourtop20
products in each region, and developed action plans to continue
toreducesupplyrisk.
• •
InourASdivision,wecontinuedworktosubstantiallyimprove
reliabilityaroundraw-materialprocurement,productionand
supply-chainplanninganddelivery.
• •
InourHPPMdivision,wemadeourstyrenebutadienerubber
(SBR)manufacturingassetsmoreflexible,sowecanproducea
broaderrangeofproductsacrossourassetbase.
• •
We continue to evaluate appropriate engineering resources to
help sites manage their capital expenditure, and their asset
integrityandreliabilityprogrammes.
• •
Weimplementedthewater-risk-improvementplanswedeveloped
forourthreeat-risktier1sites.Theseincorporateawater
stewardshipapproachandcontext-basedwaterreductiontargets.
• •
Weappointedaleadingclimateanalyticsfirmtoconduct
climateriskassessmentsandscenarioanalysis,whichwillhelp
us manage climate-related transition and physical risks to our
operationsandsupplychain.
• •
Wehavespecificinitiativesunderwaytocontinuetomanagerisks
inourrawmaterialsupplychain,whichincludereviewingtankage
provisionsforcertainrawmaterials.AnexampleisinMalaysia,where
wearespreadingrawmaterialstorageactivitiesacrossdifferent
portstoreduceexposure.
• •
Inlinewithourdifferentiatedsteeringstrategy,wewillcontinueto
assesshowweallocatecapitaltooptimiseassetintegrityandreliability.
• •
Wewillcontinueworkacrossourdivisionstoimproveourpreventive/
predictivemaintenanceprogrammes,usingnewdigitaltoolsto
proactivelydetectissues.
• •
Wewillcontinuetodevelopourstrategicunderstandingof,and
mitigation actions to manage, climate-related transition and physical
riskstoouroperationsandsupplychain.
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Reviewoftheyear / Principalrisksanduncertaintiescontinued
Operational risks continued
Process safety
Risk ownerJohnHamnett,GroupGlobalSHE&EngineeringLead
Link to strategy
Movement
<>
No change
Description 2024 response 2025 plans
Thechemicalmanufacturingindustryisinherentlydangerous.
Itinvolvestransporting,storingandprocessinghazardous
chemicals,whichleadstowide-rangingexposuretoprocess
safetyrisks.
Ourprocesssafetyriskprofileincreasedin2022,whenwe
acquiredadhesiveresinssites,giventhehightemperatures
and pressures the units operate at, and the core technology
thatwasoutsideourpreviousexpertise.
Asignificantprocesssafetyincidentcouldaffectthesafetyof
ourpeopleand/orlocalcommunities,andthewider
environment.Thiscouldresultinsignificantoperational
disruption,regulatoryfinesand/orreputationaldamage.
• •
Weimprovedhowwemanagesafety-criticalequipmentitems
and,inconjunctionwith‘bow-tie’analysis,developedanewKPI
tomonitorthis.
• •
Ourworkonlossofcontainmenthasseenthenumberofevents
stabilise.Wearedevelopingplanstoreducethesefurtherin2025.
• •
Wecontinuedtofocusonmajoraccidenthazards,developing
‘bow-tie’diagramstoverifythatourlayersofprotectionremain
strong.Thisareasignificantlyimprovedin2024.
• •
Wereviewedourproceduresandtrainingforsafety-critical
tasks,withanumberofpilotsrelatingtohuman-factor-analysis
techniquescompletedin2024.
• •
Wewillcontinueour2024activities,whicharemulti-year
programmes, and also:
– Focusonthefunctionalityofmajoraccidenthazardbarriers
– Continue to focus on improving reliability, and hence process
safety,inAS.
IT and cyber security
Risk owner Andy Axford, Group Vice President, Information Technology
Link to strategy
Movement + Impact increased because of an increasingly challenging threat landscape
Description 2024 response 2025 plans
An IT security breach or data-centre outage that has an
adverseeffectonoursystems–includingenterpriseresource
planning, SHE databases, communications and industrial
controlsystems–mayaffectourongoingoperations.Itmay
seeusloseintellectualpropertyorfaceregulatoryfines,
whichmightundermineourcompetitivepositionandcause
reputationaldamage.
Additionally, any unforeseen changes or system faults that
occurwhenmajorchangeprogrammesareimplementedmay
disruptouroperations,potentiallyincreasecosts,and/or
affectourabilitytodelivercustomerrequirements.
• •
We continued to enhance our defences through our Group Cyber
SecurityPlan,whichincluded:
– Holdingweeklysteeringcommitteemeetingstoevaluateand
addressnewandemergingthreatsandrisks
– Holdingregular,mandatory,enterprise-widecybersecurity
awarenesstrainingforouremployees
– Conducting cyber incident response simulations at
operationalandexecutivelevels,withanexpertpartner
– Implementing a security incident and event management
(SIEM)solutionalongwithamanageddetectionandresponse
(MDR) solution
– Conductingpenetrationtestingforournetworkswithour
incidentresponsepartner,withnomaterialissuesidentified
– Conductingasuccessfuldisasterrecoveryfailovertestwith
ourmajortransactionalsystem.
• •
WecontinuedtosuccessfullyimplementourPathwaybusiness
transformationprogramme,whichincludedasignificantsystem
upgradeinQ32024.
• •
Wewillcontinuetodeliverplannedcybersecurityimprovement
activities, including:
– Reviewingandinvestigatinganynewsecurityissuesandrisks
throughweeklysteeringcommitteemeetings
– Implementing improvements to our security management policies
andpracticestoremaincompliantwithnewnetworkand
information systems (NIS2 Directive) legislation in Europe
– Developingourfuturewide-area-networkstrategyandtechnology
for implementation in 2026
– Reviewingandenhancingbusinesscontinuityplansincaseof
system outage
– Movingourbusinesssystemsestatetocloudinfrastructure,witha
geographically dispersed disaster recovery capability
– Revising/renewingourcybersecurityimprovementplanforthe
nextplanningcycle.
• •
WewillcontinuetodeployourPathwayprogramme,usingan
effective governance approach that includes proven system and
businessreadinesstoolsatkeystagesofthedeploymentlifecycle.
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Reviewoftheyear / Principalrisksanduncertaintiescontinued
Operational risks continued
Energy price risk in Europe
Risk owner AndrewWard,VicePresident,GroupProcurement
Link to strategy
Movement
<>
No change
Description 2024 response 2025 plans
Significantenergypricerisesandvolatilitycouldreducethe
competitiveness of our European businesses, because of
increased production costs and our inability to pass on these
costs to customers, and increased competition from other,
lower-energy-priceregions.
Theveryhighpricesseenin2022afterthestartofthewar
inUkrainehavenowlargelybeenalleviatedby:
• •
Availabilityofnewliquefiednaturalgas(LNG)import
infrastructure
• •
Strong LNG supplies, primarily from the USA
• •
Increasedrenewablesandlowerindustrialgasdemand
inEuropeandChina.
However,generalenergypriceriskresultingfromglobal
geopoliticalinstabilityneedstobemanagedappropriately.
• •
We continued to maintain our supply contracts over the long
term and use active price risk management strategies aligned to
ourdifferentbusinesses.
• •
Weundertooktargetedfinancialhedgingtomanageourprice
riskwithinourthird-partyheat-supplyagreements.
• •
We continued to reduce our demand through site-focused
energy-efficiencyanddecarbonisationinvestments.
• •
Weundertookadetailedstudyforalong-termvirtualpower
purchase agreement (vPPA) in Europe to secure our supply of
renewableelectricity.However,weconcludedthiswouldnotbe
prudentatthistime.Wecontinuetomonitorthedevelopingarea
ofrenewableelectricitycontracting.Wearecurrentlyconsidering
anaggregatedvPPA,wherewecontributeaproportionof
demand to a development that is more appropriate to our future
demandandrisk.
• •
Wewillcontinueto:
– Manage our supply contracts over the long term, and have
appropriatepriceriskmanagementstrategiesforgas,power
andcarbonallowancesundertheEUETSscheme(physical
andfinancial)alignedtoourdifferentbusinesses
– Reduceourdemandthroughsite-focusedenergy-efficiency
anddecarbonisation(fuel-switching)investments
– Reviewopportunitiesforappropriatelysizedlong-termPPAs,
eitheronsite,nearsiteorvirtual(financial).Ourdemandfor
renewableelectricitywillevolveasweswitchawayfromgasfor
ourprocess-heatingrequirementsundertheenergytransition,
offsetbycontinuedreductioninouroverallenergydemand.
Synthomer plc Annual Report 202454
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Reviewoftheyear / Principalrisksanduncertaintiescontinued
Compliance risks
Ethics and compliance
Risk owner Anant Prakash, Chief Counsel and Company Secretary
Link to strategy
Movement
<>
No change
Description 2024 response 2025 plans
Ifwefailtocomplywithrelevantlegislationandregulatory
guidance,wemayfacesignificantfinancialpenalties,lossof
materialassets,unquantifiablereputationaldamageand
increasedregulatoryscrutiny.Theseissuesmaycausedelays
in business operations and adversely affect the Group’s ability
topursueitsstrategy.
Ifwefailtoproactivelyaddresssustainability,ethicsand
compliancegoals,mandatesandregulations,wemayface
future penalties, loss of competitiveness and reduced
shareholdervalue.
• •
We launched a refreshed Code of Conduct across the Group,
withroadshowstoenhanceawarenessofexpectedbehaviours
andtoemphasisecompliancerisksacrossouroperations.
• •
Wereviewedourexistingsuiteoftrainingmodulesandstarted
anexercise,withanewtrainingpartner,torefreshthose
modulestocaptureawidergroupofouremployees.
• •
Wecontinuedtomakesureournewthird-partyonboarding
processeswereadoptedacrosstheGroup,andstartedour
enhancedactivemonitoringprocedures.
• •
We improved our governance processes covering modern
slaverywithaworkinggroupcoveringGroupfunctionsand
allbusinesses.
• •
WecontinuedourpreparationstocomplywiththeEconomic
CrimeandCorporateTransparencyAct2023.
• •
Wecontinuedmonitoringemergingregulatoryrequirements
relatedtoclimatechange,water,biodiversity,greenwashing
andcompanyreporting.
• •
To prepare for Corporate Sustainability Reporting Directive
(CSRD)reporting,weconductedourdoublemateriality
assessment,whichwillbeusedtodefineourregulatory
reportingrequirements.
• •
WewilllaunchanewGroup-widemandatorytrainingcoursecovering
ourCodeofConduct.
• •
Wewilllaunchasetofupdatedtrainingmodulesinallapplicable
languages covering:
– Competitionlawandanti-trust
– Anti-bribery and corruption (ABC)
– Data protection
– Modernslavery.
• •
Wewilllaunchimprovedprocesses(usingourHRsystem)torecord
andreportongiftsandhospitality,andconflictsofinterest.
• •
WewillrefreshourGroupcompliancepoliciestoensurealignment
withcurrentlegislation.
• •
Wewillconductafraudriskassessmenttounderstandwhetherfraud
controlsarerobustandappliedconsistentlyacrosstheGroup.
• •
Wewillfinaliseourpreparations(andevaluateourcontrols)tocomply
withtheEconomicCrimeandCorporateTransparencyAct2023,and
anysubsequentsecondarylegislation.
• •
Wewillcontinuetomonitor,assessanddefineourEUsustainability-
relatedregulatoryreportingrequirementsfollowingtheEU
announcementon26February2025.
Synthomer plc Annual Report 202455
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Reviewoftheyear / Principalrisksanduncertaintiescontinued
Financial risks
Financial markets and balance sheet
Risk ownerLilyLiu,ChiefFinancialOfficer
Link to strategy
Movement
—
Reduced,givenimproveddebtmaturityprofile
Description 2024 response 2025 plans
Thefinancialmarketsremainvolatile,givenmacroeconomic
andgeopoliticaluncertaintiesandinflationarypressures.This
hasdrivensignificantchangesininterestratesinrecentyears
intheGroup’smajormarkets.
GiventheGroup’scurrentfinancialleverage,financialmarket
volatilitycouldaffectthequantumand/orcostoftheGroup’s
futurerefinancingactivities.
• •
Strengthening the balance sheet continued to be a priority
fortheCompany,so:
– Forprudence,theGroupagreedwithitsrelationshipbanks
and UK Export Finance to extend the period of temporary
covenant relaxation on its facilities to make sure appropriate
headroomwasmaintained.Wecontinuedtomonitormarket
conditionscloselyandkeptourotherfinancingarrangements
underreview.
– Wesuccessfullytendered€370mofourbondsduein2025,
reducing gross debt and extending maturities by issuing
€350mofbondsduein2029.Ournextsignificantdebt
maturityisnowin2027.
– We continued to explore opportunities to manage our
portfolio,includingdivestmentsofnon-corebusinesses.
WesoldourCompoundsbusiness,usingtheproceedsto
reducenetdebt.
– We maintained rigorous capital allocation policy and focused
oncashgeneration,guidedbyourstrategy.
• •
Weintendtorepaytheremaining€150mdueonourJuly2025bond
fromexistingliquidity.Wewillcontinuetomonitorfinancialmarket
conditions through our key relationship banks and our debt advisers,
asweassessmedium-termfinancingneeds.
• •
Wewillcontinuetosupportthereturntoourtarget1–2xleveragein
the medium term, including through:
– Drivingourcashmanagementactions,followingourrigorous
capitalallocationpolicy,focusingonworkingcapitalmanagement,
costreductionsandimprovingcashgeneration.
– Managingourdivestmentprojectsinlinewithourstrategy
– Keepingunderreviewadditionalmeasurestoenhanceour
operatingleveragetoarecoveryinend-marketdemand.
Key to strategy icons (our strategy is described on page 3)
Organicgrowthinattractiveendmarkets
Rigorousandconsistentportfoliomanagementtobuildfocused,leadingpositions
Operationalandcommercialexcellenceinhowwerunourbusiness
Differentiatedsteeringinhowweallocatecapitalandtalent
Diversity,equityandinclusion,andholisticpeopledevelopment
Criticalenabler
Synthomer plc Annual Report 202456
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Non-financialand
otherdisclosures
58 Climate Action report
62 Viabilitystatementands.172disclosure
63 Non-financialandsustainability
informationstatement
Improving
Our reliability and performance improvement programmes
contributed to £26m in ‘self-help’ benefits in 2024.
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Synthomer plc Annual Report 202457
Non-financialandotherdisclosures
Climate Action report
Climate change with its associated environmental
and socioeconomic impacts presents both ongoing
and potential risks throughout oursupply chains
and operations, and for our customers and end
markets. But, as a speciality chemicals business,
it also brings opportunities for Synthomer.
This section provides information pertaining to climate-
relatedfinancialdisclosurerequirementsfollowing
theframeworkofrecommendationssetoutbythe
TaskForceonClimate-RelatedDisclosures.
Wehavebeenworkingontheserisksandopportunities
formanyyears.Weremaincommittedtotakingaction
andsupportingpoliciesalignedwiththegoalsofthe
2015 Paris Climate Agreement to limit the rise in global
temperaturestowellbelow2°Cabovepre-industrial
levels, and to pursue efforts to limit the temperature
increaseto1.5°C.
In2021and2022,weconductedourdeep-divescenario
analysisworkintothepotentialrisksandopportunities
presentedbythreedifferentscenarios–averageglobal
temperaturerisesof1.5°C(RCP1.9/SSP1),2°C(RCP2.6/
SSP2)and3°C(RCP8.5/SSP3)abovepre-industriallevels.
Thethreescenariosaddressedthreetimehorizons
(short term to 2025, medium term to 2030 and long
term 2030 to 2050) and covered all three of our key
chemistries (acrylic emulsions, synthetic elastomer
emulsions and hydrocarbon resins) in our three main
regions(Europe,Asia,USA)coveringmorethan50%
ofourproductsbyvolume.
Throughourscenarioanalysis,weidentifiedfiveprimary
responses to reduce the risks and take advantage of the
opportunitiesrelatedtoclimatechange.Theseresponses
highlighted the need for us to take tangible action
now,whicheverclimatescenarioultimatelyplaysout.
Asummaryofthepriorityresponsesandouractions
todateiscontainedinthetablebelow,supported
byinformationthroughoutthisAnnualReport,
andinthe‘Climateaction’insightpaperandESG
PerformanceSummarypublishedonourwebsite.
In2024,weengagedaclimateanalyticsfirmtobuildon
ourinitialscenarioanalysis.Theyarehelpingusrevise
and expand our climate risk assessment and scenario
analysis to cover all Synthomer operations to support
disclosurerequirementsandfurtherdevelopourstrategic
understandingofclimateriskanditsfinancialimpacts
forourbusiness.Thisworkwillbecompletedin2025.
TCFD recommendation Our disclosure Supplementary/complementary information
Governance
a Describe the Board’s
oversightofclimate-related
risks andopportunities.
• •
The Board is responsible for the overall oversight of strategic risk
management,includingclimate-relatedrisksandopportunities.
• •
TheBoardreviewsourriskprofiletwiceayear.Thematerialispreparedbythe
ExecutiveRiskCommittee(ERC),whichreportstotheAuditCommittee.
• •
TheAuditCommitteeensuresthattheBoard’sriskmanagementiseffective.
Climate-relatedrisksarepartoftheagenda.
• •
Anylargecapex,M&Aandbusinessplanproposals,includingsustainability
projects,areapprovedbytheBoard–climatechange(andcarbontax)are
consideredasfactorswhenassessingtheseplans.
• •
TheBoardengagesquarterlywiththeVicePresident,ESGtoreviewtherisks
andopportunitiesinrelationtoSynthomer’sabilitytodrivestrategicvalue
throughESG(includingclimatechange).
Howwemanagerisk:pages45 to 48
Ourgovernanceframework:page75
The Board’s year: pages 65 to 68
Audit Committee report: pages 87 to 94
Consistency with TCFD recommendations
Fullyconsistent Partiallyconsistent
Synthomer plc Annual Report 202458
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Non-financialandotherdisclosures / ClimateActionreportcontinued
TCFD recommendation Our disclosure Supplementary/complementary information
Governance continued
b Describe management’s
roleinassessing and
managing climate-related
risks andopportunities.
• •
The ERC is chaired by the CFO and includes all members of the Executive Committee and key
functionalvicepresidents(includingVP,ESG).Itmeetstwice-yearlytoidentify,assessand
managetherisksandopportunitiesforGroupstrategy(includingthoserelatedtoclimatechange).
• •
The Executive Sustainability Steering Committee is chaired by the CEO and includes all members
oftheExecutiveCommitteeandkeyfunctionalvicepresidents(includingVP,ESG).Itmeets
quarterlyanditsroleincludesensuringthatourplansforclimatechangearealignedacross
Synthomer,areproperlyresourcedandcoordinated,andthatourclimate-relatedmetricsand
targetsaremanagedeffectively.
• •
An Executive Committee member has been assigned as sponsor for our climate transition action
planincludingthedeliveryofourscience-basedScope1and2targets,andScope3targets.
Eachsponsorisresponsibleforensuringwehavetherightplansinplacetodeliverwithinthe
2030timeframe.
• •
Thedivisionalpresidentseachundertakequarterlyinnovationportfolioassessments
toassessandprioritiseproductdevelopment,includingforlower-carbonproducts.
Sustainability in focus: pages 26 to 31
Howwemanagerisk:pages45 to 48
Innovation in focus: pages 34 to 35
Strategy
a Describe the climate-related
risks and opportunities the
organisation has identified
over the short, medium,
andlong term.
Thefollowingaretherisksandopportunitiesidentifiedbyourdeep-divescenarioanalysis:
• •
Risks
Transition risksincludepotentialcarbontaxesrelatedtoourrawmaterialsandownoperations,
aswellasenergypricerisk(seepage54).Inaddition,inthemediumterm,wealsoexpecttosee
increasing market and environmental policy changes drive the need for a transition in our future
productportfolio,requiringgreaterlow-carbonproductinnovation.FailuretodeliverScope1and2,
andScope3GHGemissionsreductionby2030inlinewithourscience-basedtargetcouldgive
risetoreputationalrisk.
Physical riskswereexperiencedontwooccasionsinSeptember2024.HurricaneHeleneaffected
ourRoebuckandChestersitesandcommunitiesinSouthCarolina,USA,whileStormBoris
affectedtheregionsurroundingourPischelsdorfsiteinAustria.Allsitessuccessfullyimplemented
theiremergencyplansandnomaterialimpactsresulted.Wehaveidentifiedpotentialwater-related
risksatthreeofourtier1manufacturingsites.Inthemediumterm,thepatternofincreasingglobal
averagetemperaturesandthefrequencyofextremeweathereventscouldaffectourplants’ability
tooperateefficientlyandcouldgiverisetosupplierdisruption.
• •
Opportunities
Growth in demand for products and servicesthatwillservicealow-carbonorcirculareconomy
invariousmarketsandregions.Intheshortterm,wehavehadincreasedpositiveengagementwith
keycustomersregardingthepotentialforlow-carbonproducts.Theenablingenvironmentisstill
maturing,butinthemediumterm,weexpectnewbusinessmodels,regulatoryframeworksand
end-marketrequirementstodriveincreaseddemandforsuchproductsandservices.
Cost savings and market growth throughtheearlyadoptionoflow-carbontechnologies,for
exampleusingrenewableenergyorswitchingtolower-carbonandrenewablerawmaterials,
althoughthisdependsonthespeedatwhichsuchtechnologiesormaterialsbecomecost
effectiveandwidelyavailable.
Competitive advantage from our network of sites across the world.Sincewecanservice
customersfromavarietyofmanufacturingsites,ournetworkmakesusamorereliablesupplier,
meaningwearemoreresilienttophysicaloperationalrisks.
Our strategic direction towards a more speciality portfoliowheresustainabilitybenefitsincluding
lowercarbonareintegratedintoourinnovationpipelineandsupportthecustomerproposition.
Howwemanagerisk:pages45 to 48
Sustainability in focus: pages 26 to 31
Climate action insight paper at
Synthomer.com
Synthomer plc Annual Report 202459
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Non-financialandotherdisclosures / ClimateActionreportcontinued
TCFD recommendation Our disclosure Supplementary/complementary information
Strategy continued
b Describe the impact
ofclimate-related risks
andopportunities on the
organisation’s businesses,
strategy, and financial
planning.
• •
Intheshortterm(to2025),aroundthreequartersofanypotentialfinancialimpactoftherisksfrom
climatechangeforourbusinesswillcomefromtransitioningtoalow-carbon,circulareconomy
(mainlyhighercosts),witharoundaquartercomingfromphysicalrisks(moreextremeweather
eventsaffectingouroroursuppliers’operations)undera1.5ºCtemperaturerisescenario.
• •
Underthisscenario,wealsoseethegreatestpotentialopportunityforgrowthindemandfromour
customersandtheirconsumers,forthoseproductsthatofferlower-carbonorcircularitybenefits.
• •
Lookingbeyond2025,ourscenarioanalysesindicatedthattransitioningtoalow-carboneconomywouldremain
ourmostsignificantpotentialclimate-relatedfinancialrisk;by2030and2050therelativeweightingoftransition
riskscomparedtophysicalriskswillbecomehigher(approximately90:10vsapproximately75:25in2025).
• •
Indirectemissionsfromourvaluechain(Scope3)makeupapproximately85%ofourtotalcarbonfootprint,
ofwhichcategory1(purchasedgoodsandservices)accountsformorethan85%.Ourtransitionplanningis
thereforefocusedonreducingourvalue-chainGHGemissions.
• •
Anewprojectstartedin2024tofurtherincorporateclimatechangerisksandopportunitiesintothebusiness
planningprocesses,withtheobjectiveofimprovingourforecastingofthepotentialfinancialimpactsrelated
toournet-zerotransitionplan.
• •
In2025wewillconductfurtherscenarioanalysisandfinancialanalysistofullyaddressthisrecommendation.
Sustainability in focus: pages 26 to 31
c Describe the resilience of
theorganisation’s strategy,
taking into consideration
different climate-related
scenarios, including a 2°C
orlower scenario.
• •
TheSBTi’sTargetValidationTeamhasdeterminedourScope1and2targetambitionisinlinewitha1.5°C
trajectory,whileourScope3targetambitionisinlinewitha<2°Ctrajectory.
• •
We perform sensitivity analysis for our Scope 1 and 2, and Scope 3 GHG emissions taking account of
eachdivision’sstrategicbusinessplanstoinformandassesstheresilienceofourbusinessplanning.
• •
Ouroverallclimateresilienceisintrinsicallylinkedtoourabilitytocommercialiselower-carbon
rawmaterials,manufacturingandproductsthroughourcorporatestrategy.
• •
Throughourscenarioanalysisweidentifiedfiveprimarystrategicresponses,whicheverclimatescenario
ultimatelyplaysout.ThefiveresponseshavealreadybeenincorporatedintoSynthomer’sstrategicplanningand
ourVision2030goals.
• •
Ourfiveresponses(inorderofpriority)andtheworkconductedin2024are:
1. Work with selected suppliers: wehavebeguntoengagesuppliersofourkeyrawmaterialstoidentifyoptions
tosourcethelowest-carbonmonomersfromexistingfeedstocks.Thisiswherewehavethepotentialtomakethe
mostimmediateimpactonourScope3emissions.Ourmodelssuggestourplannedactivityin2025willreduce
ourScope3emissionsby2%.Inthemediumterm,wearealsoworkingtoidentifyandintroducealternative
feedstocks,includingthosefrombio-basedorcircularsourceswheretheyofferalower-carbonsolution,although
wemayhavetoconsidertrade-offswithotherenvironmentalfactors,suchaslandusechange.
2. Reduce our Scope 1 emissions: wehavealreadytakensignificantactionbyendingtheuseofcoalinour
manufacturingsites.Intheshortterm,wearecontinuingtodecarboniseouroperationsthroughprocess
optimisationaspartofourmanufacturingexcellenceprogramme.Inthemediumterm,ourfive-yearcapitalplan
hasactiveprojectsfocusedonelectrification,heatpumpsandsolarpower.Andforthelongterm,weareinvolved
inafeasibilityprojectfortheuseofgreenhydrogenatoneofourkeyEuropeansites.
3. Reduce our Scope 2 emissions: 80%ofourpurchasedelectricityalreadycomesfromrenewablesources
andwewillcontinuetoreduceandoptimiseelectricityandheatconsumptionintheshortandmediumterm.
Wecontinuetomonitorthedevelopingareaofrenewableenergycontracting.
4. Innovate to decarbonise our products:wearecontinuingtocreateandrespondtodemandfromour
customersformoresustainableproducts.In2024,werevisedourproductsustainabilityscorecardtosupportthe
furtherprioritisationoflower-carbonproductdevelopmentforcommercialisationinthemediumterm.
5. Enhance our physical resilience:usingtheWorldResourcesInstitute(WRI)Aqueducttools,wehaveassessed
thewater-relatedrisksatourownoperations.Wearenowimplementingimprovementplansforthethreesites
identifiedasbeingathighrisktoensurebusinesscontinuityandregulatorycomplianceinthemediumterm.
CEOreview:pages7 to 9
Innovation in focus: pages 34 to 35
Sustainability in focus: pages 26 to 31
Synthomer plc Annual Report 202460
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Non-financialandotherdisclosures / ClimateActionreportcontinued
TCFD recommendation Our disclosure Supplementary/complementary information
Risk management
a Describe the Company’s
processes for identifying
andassessing
climate-related risks.
• •
In2020and2021,weconducteddeep-divescenarioanalysistoidentifyour
risksandopportunities.Thisworkwillberevisedandexpandedin2025.
• •
Weaddressclimate-relatedriskidentificationandassessmentcontinuously
asanintegratedpartofourriskmanagementactivities.
• •
Additionally,oursustainabilitymaterialityassessment(whichincludesstakeholder
engagement)wasrevisedin2024.Thisiskeytoourbusinesscontinuityand
selectionofmostmaterialsustainabilitytopics.
Sustainability in focus: pages 26 to 31
Howwemanagerisk:pages44 to 48
HowtheBoardengages:pages76 to 81
b Describe the Company’s
processes for managing
climate-related risks.
• •
We address the management of the actions to mitigate
climate-related risk as an integrated part of our risk management
activities and through the activities of the Executive Sustainability
SteeringCommitteeandSustainabilityDevelopmentteam.
Sustainability in focus: pages 26 to 31
Howwemanagerisk:pages44 to 48
c Describe how processes
foridentifying, assessing,
andmanaging climate-related
risks are integrated into
theCompany’s overall
riskmanagement.
• •
Climate-related risk management forms an integrated part of
Synthomer’songoingriskmanagementwork.Significantrisks
areaddressedinalignmentwiththeEnterpriseRiskManagement
structure,wheretheBoardofDirectorsoverseestheeffectiveness
ofriskmanagementinSynthomer.
Howwemanagerisk:pages44 to 48
Metrics and targets
a Disclose the metrics used
bythe Company to assess
climate-related risks and
opportunities in line with
itsstrategy and risk
management processes.
• •
WereportonenvironmentaltargetsandKPIsinourAnnualReport,ESGPerformanceSummary
andESGDatapack.
• •
Relevant climate metrics used include energy consumption (by type), leading (internal use only)
andlaggingabsoluteandspecificGHGemissions(Scope1and2,andScope3),%Scope1
emissionsoperatingundercarbontaxregulations,%capexforclimate-relatedprojects,number
ofsitesinareasofhighwaterrisk,volumeofwateruseandconsumption,%revenuefromsites
inareasofextremelyhighwaterrisk,%newproductswithenhancedsustainabilitybenefits,%
procurementspendwithasustainabilityrating.
Sustainability in focus: pages 26 to 31
Our Vision 2030 progress: pages 41 to 43
Environmental performance summary:
pages 191 to 194
ESG Datapack
b Disclose Scope 1, Scope 2,
and, if appropriate, Scope 3,
greenhouse gas (GHG)
emissions, and the
relatedrisks.
• •
We report intensity and absolute GHG emissions on Scope 1, 2 and 3 in our
AnnualReport.
• •
We report on Scope 1, 2 and 3 according to the Greenhouse Gas (GHG) Protocol
andourdatareportingissubjecttoalimitedassurancestatementbyan
independentauditorindependentverificationatalimitedassurancelevelto
ISAE3000.
Sustainability in focus: pages 26 to 31
Environmental performance summary:
pages 191 to 194
c Describe the targets
usedbythe Company to
manage climate-related
risksandopportunities
andperformance
againsttargets.
• •
We have set validated science-based targets for Scope 1 and 2,
andScope3GHGemissions.
• •
The Remuneration Committee set the Scope 1 and 2 targets for
inclusionintheLong-TermIncentivePerformanceSharePlan
(PSP)–seepage112.
Sustainability in focus: pages 26 to 31
Directors’ remuneration report: pages
98 to 116
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Non-financialandotherdisclosures
InaccordancewiththerequirementsoftheUK
Corporate Governance Code, the Directors have
assessedtheviabilityoftheGroupoverafive-year
period to December 2029, being the period covered
bytheGroup’sapprovedstrategicplan.Thisplanis
updated annually, in a process led by the Executive
Committeewithinputfromtherespectivebusinesses
andfunctions.Itincludesanalysisofproductandprofit
performance,cashflow,investmentprogrammesand
returnstoshareholders.Theplanispresentedtothe
Boardeachyearasapartofitsannualstrategicreview.
The Directors consider this period to be an appropriate
timehorizonforthestrategicplan,beingtheperiod
overwhichtheGroupactivelyfocusesonitslong-term
product development and capital expenditure
investments.AperiodbeyondDecember2029is
considered by the Directors to be too long, given the
uncertaintiesthatexistbeyondthistimeframe.
In making their assessment, the Directors have
considered the diverse activities and product offering of
the Group in terms of geographies, chemistry and end
markets.TheDirectorshavealsoconsideredtheGroup’s
currentfinancialposition,includingtherecentlyrefinanced
andfuturecommittedfinancingfacilities,whichhave
beenassumedtoberefinancedatmaturityasrequired.
A sensitivity analysis has been undertaken, focusing
ontheimpactoftheprincipalrisks(detailedaboveon
pages 49 to 56)overthefive-yearperiod,andthe
availabilityandlikelyeffectivenessofmitigatingactions.
The risks have been assessed for their potential impact
on the Group’s business model, future trading and
fundingstructure.Thesensitivityanalysishasconsidered
a number of severe but plausible scenarios, linked to the
risksconsideredtohavethemostsignificantfinancial
impact.Inallcases,theimpactwasconsideredonboth
liquidityandtheborrowingcovenant.
The scenarios included:
• •
Tradingdownturnsasaresultofincreased
competition or lack of demand
• •
Delayed re-stocking and economic recovery in
endmarkets
• •
Failuretosuccessfullycommercialisenewproducts
andbenefitfrominnovation,leadingtolower
salesvolumes
• •
PriceinflationfortheGroup’skeyrawmaterials
andenergy
• •
Failure to deliver on transformation programmes
• •
Significantforeignexchangerateappreciation
againststerling.
Variousmitigatingactionshavebeenidentifiedsothat,
should any of these scenarios crystallise, the Group
couldtakeactionquicklytosignificantlyreducecosts
andcashoutflows,asdemonstratedduringthecourse
oftheCOVID-19pandemicin2020.Whilethissensitivity
analysis did not consider all the risks that the Group may
face, the Directors consider that it is reasonable in the
circumstancesoftheinherentuncertaintyinvolved.
Noneofthesescenariosindividually,orwhencombined,
threaten the Group or its ability to take appropriate
mitigations to address them, and the combined impact
of these scenarios has been evaluated as the most
severestressscenario.
Directors also considered the possible impact of climate
changeonfuturecashflows,inparticularcarbon
pricing.Intheeventofglobalcoordinationofcarbon
pricing, the Directors consider it likely that the Group
wouldbeabletopasssuchcostsontoourcustomersif
material.Thesensitivityanalysishasthereforenotbeen
amendedtoincludereducedprofitsfromcarbonpricing.
Based on the analysis, the Directors have a reasonable
expectationthattheGroupwillbeabletocontinuein
operation and meet its liabilities as they fall due over the
five-yearperiodoftheirassessment.
Section 172(1) statement and
stakeholderengagement
We value our engagement with all our stakeholders,
including our key stakeholders: customers, employees,
communities, suppliers, investors, and governments
and authorities. Our s.172 compliance statement, which
is on pages 76 to 81, describes how the Directors have
had regard to stakeholders’ interests and other matters
when discharging Directors’ duties set out inSection
172 of the Companies Act 2006. It includes examples
of how stakeholders’ interests were considered during
principal decisions taken as part of the year.
Viability statement
Synthomer plc Annual Report 202462
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Non-financialandotherdisclosures
The table below summarises where key elements of our governance reporting (including non-financial matters as required by theNon-Financial Reporting
Directive) canbefound, some of which are integrated into other sections of our Annual Report. This year, we have also expanded our reporting on ESG
matters through our Sustainabilityinsights, available at Synthomer.com
Reporting requirement Relevant policies and standards that govern our approach Where to read more in this report Where to read more on our website
Environmental matters
Code of Conduct
Environmental Policy
Water Management Policy
Sustainable Procurement Policy and Strategy
Task Force on Climate-related Financial
Disclosures (TCFD) Recommendations
Sustainability in focus, pages 26 to 31
People in focus, pages 36 to 40
Our Vision 2030 progress, pages 41 to 43
Climate Action report, pages 58 to 61
How we manage risk: pages 44 to 48
The Board’s year, pages 65 to 68
Environment insight paper
Governance insight paper
Group Policies
Employees
Our values
Code of Conduct
Health & Safety Policy
People in focus, pages 36 to 40
Our Vision 2030 progress, pages 41 to 43
How the Board engages (s.172 compliance),
pages76 to 81
The Board’s year, pages 65 to 68
Social insight paper
Governance insight paper
Group Policies
Social matters
Responsible Care Guiding Principles
Synthomer Cares
Our business model, page 2
People in focus, pages 36 to 40
Our Vision 2030 progress, pages 41 to 43
Social insight paper
Group Policies
Respect for human rights
Code of Conduct
Modern Slavery Act Statement
Conflict Minerals Policy Statement
Sustainable Procurement Policy and Strategy
Sustainability in focus, pages 26 to 31
People in focus, pages 36 to 40
Our Vision 2030 progress, pages 41 to 43
Social insight paper
Governance insight paper
Group Policies
Anti-corruption and anti-bribery
Code of Conduct
Ethics Helpline
Our values
Compliance risks, page 55 Governance insight paper
Group Policies
Our business model
Our business model, page 2
Our strategy, page 3
Principal risks and uncertainties
Risk Management Framework How we manage risk: pages 44 to 48
Non-financial KPIs
Our key performance indicators, page 11
Our Vision 2030 progress, pages 41 to 43
ESG Datapack
Non-financialandsustainabilityinformationstatement
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Str engthening
Our Board has continued its work to oversee and challenge the
delivery of Synthomer’s strategy.
Governance report
65 The Chair’s introduction
65 The Board’s year
69 The Board at a glance
70 Our Board of Directors
74 Our Executive Committee
75 Ourgovernanceframework
76 HowtheBoardengages(s.172compliance)
82 CompliancewiththeCode
87 Audit Committee report
95 Nomination Committee report
98 Directors’ remuneration report
117 Other regulatory disclosures
119 Statement of Directors’ responsibilities
Synthomer plc Annual Report 202464
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The Chair’s introduction The Board’s year
On behalf of the Board, I am pleased to share
ourGovernancereportfor2024.
SincejoiningtheBoardasanIndependentNon-
ExecutiveDirectorandChairdesignatewitheffect
from 1 September 2024, and succeeding Caroline
JohnstoneasChairon1January2025,Ihavebeen
impressedbythededicationandcommitmentshown
by everyone at Synthomer to transforming our
businessandcreatingaplatformforvaluecreation.
Robust, transparent governance is critical for any
business, and even more so for a company such
asSynthomer,whichisdeliveringatransformation
programmethatwillmakeitstrongerandmore
focused,whilenavigatingchallengingmarketconditions.
Overseeing and scrutinising our strategy are key
responsibilitiesoftheBoard,andthiswasreflected
intheBoard’sactiveprogrammethroughouttheyear,
describedinthefollowingpages.Atthesametime,
weknowthattheCompany’ssuccessreliesonthe
support of our stakeholders, and examples of the
Board’s stakeholder engagement can be found here,
aswellasintheStrategicreport.Onapersonal
note,Ihavealreadyhadthepleasureofmeeting
anumberofourstakeholderswithinandbeyond
thebusiness–Ithankthemfortheirsupportfor
Synthomer,andlookforwardtoengagingwith
themfurtherinthefuture.
Peter Hill, CBE
Chair
This has been another year of significant
progress in our multi-year evolution to
becomea more focused and truly global
speciality chemicals business.
Since2022theBoardhasspentthemajorityofits
time focused on supporting and challenging the
Executive Committee in setting our strategy and
strengtheningthebalancesheet.Inlinewiththese
objectives,thisyeartheBoardcontinuedtooversee
Synthomer’sstrategictransformationtowards
becoming a higher-returning and more resilient
company.Atthesametime,theBoardturnedmore
ofitsattentiontothelonger-termoutlook,reviewing
thetrends,opportunitiesandrisksforourbusiness.
Taking a longer-term view
TheBoardparticipatedintwo‘horizon-scanning’
sessions facilitated by outside experts to help
guideourthinking.Thefirstfocusedonkeyglobal
geopolitical challenges, such as the increasing
relianceoftheworld’smanufacturingeconomy
onChineseeconomicvitalitysetagainstthegrowing
regionalisationofvaluechains.Inthesecond,the
Boardengagedwithachemicalsexpertwhooutlined
keymegatrends,includingtheimpactofartificial
intelligenceandthewayendcustomers’growing
sustainabilityagendaisredefiningourindustry.
Both sessions led to a rich discussion among
Boardmembersandconfirmationthatwehave
therightoverallstrategytotakeadvantageofthe
opportunitiesahead.TheBoardalsoagreedthat
innovation and sustainability remain key to that
strategy,andthatwemustcontinuetosharpenour
focusonbothacrossallourdivisions.TheBoard
recognisesthattherewillbechallengesalong
theway,includingtheneedtocreaterealvalue
differentiationtosucceedinourchosenendmarkets.
“ Robust, transparent governance
is critical for any business, and
even more so for a company
suchasSynthomer,whichis
delivering a transformation
programmethatwillmake
itstrongerandmorefocused,
whilenavigatingchallenging
marketconditions.”
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The Board’s year continued
Reviewing and refining our portfolio
The Board has continued to support the Executive
Committee’sworktoactivelymanageourportfolio
toincreasefocusandconcentrateourresourcesonthe
highest-returningopportunities.So,whilewecompleted
the divestment of our latex compounding operations
toMatcoNVinMay2024,theBoardalsoagreedwith
the Executive Committee’s decision to put another
divestmentonholduntilmarketconditionsimprove.
TheBoardregularlyreviewsprogressinthenon-core
programme, including the three divestment processes
currentlyunderway,aswellasinitialplanstomanage
anystrandedcostsassociatedwiththem.TheBoard
also debated and endorsed the Executive Committee’s
decision to recategorise the speciality vinyl polymers
business as ‘core’ to our strategy, after its business
teampresentedanewbusinessplan.
Continued focus on our balance sheet
andcapitalallocation
Thedecisiveactionswetooktoaddressourbalance
sheetin2023,includingourrightsissue,significantly
strengthened Synthomer, reducing net debt by half
duringthatyear.Reducingleveragetowardsour1to2x
target range in the medium term remains a key priority
for the Board and Executive Committee, although
werecognisethatthepaceofthiswillbesomewhat
determined by the timing of demand recovery in our end
markets.Ongoingworktorationaliseourportfoliowill
help us do this, but only at an appropriate price and
withoutdilutingvalue.Whileweenvisagereinstating
dividends–and/orothertypesofshareholderreturn–
whenappropriate,theywillremainsuspendedatleast
untiltheGroup’sleverageisreducedbelow3xnetdebt
toEBITDA.
The Board also spent time this year considering funding
options, including approving and overseeing the timing
andamountofrefinancingSynthomer’sbonds.The
Board endorsed the decision to tender in April 2024 for
€370mofourbondsduein2025,reducinggrossdebt
andextendingmaturitiesbyissuing€350mofbonds
duein2029.
Alongsidethiswork,theBoardrecognisesthat
Synthomer’s strategy depends on relentlessly allocating
capitalandotherresourcestowardsoptimumvalue
creation.Thishasbeenanimportantfocusin2024.
Ongoing macroeconomic challenges and subdued
market activity have continued to affect our business,
but they have also encouraged us to think more
creatively.Thisyear,forexample,theBoardapproveda
multi-year,zero-capitaltechnologypartnershipthat
leveragesourHealth&Protectionintellectualproperty,
technology and manufacturing expertise for the onshore
US nitrile latex market (see page 25).Thisisagood
exampleofthewaythatSynthomercandrawonthe
deepexpertiseacrossourbusinesstodevelopnew
relationshipswithoutsignificantcapitalinvestment.
WeexpecttoseeSynthomerdevelopmoreofthese
partnershipsinfuture.
The Board also approved the Group’s overall capital
expenditureplan,whichseekstobalanceopportunities
forgrowthwithintheconstraintsofthecurrentmarket
environmentwhile,ofcourse,continuingtoprioritise
thesafetyofourpeople.TheBoardstronglyendorses
the management team’s focus on prioritising capital
expenditure on speciality businesses in attractive
growthgeographieswithrapidpaybacks,aswellas
actions–suchastheclosureoftheFitchburg(USA)
site–tooptimiseoursitefootprintandcapitalallocation.
Overseeing performance management
inourdivisionsand functions
Divisional performance has remained another key focus
fortheBoardthisyear.Aswellasannualstrategicreviews
for each division, the Board received detailed updates on
ourASdivisionateverymeetingthroughout2024.The
division’sperformanceandreliabilityhavesignificantly
improvedinthepast12months(seepage23),andwe
expect the cadence of those updates to become more
alignedwithourotherdivisionsinthecomingyear.
The Board also received periodic updates on key
projectsmanagedbythefunctionalteams.Forexample,
in2024theBoardwasgivenadetailedreviewofthe
successfulthroughputenhancementprojectatour
LeHavresite(seepage33),andconsideredwiththe
managementteamwaysinwhichtheinsightsand
expertisegainedfromthisprojectcouldbedeployed
mosteffectivelytotherestoftheorganisation.
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The Board’s year continued
Driving innovation and sustainability
ineverything we do
OneofthewaysthatSynthomercansharpenitsfocus
isthroughournewInnovationTaskforce.Aresultofthe
sustainabilityworkinggroupthattheBoardsetupin
2023, the taskforce is chaired by our Non-Executive
Director Roberto Gualdoni, and includes other Non-
Executive Directors, members of our Executive
Committee, some of our Group and divisional innovation
leadersandourVPofESG.Liketheoriginalworking
group, the taskforce reports directly to the Board and
hasalreadytakenimportantstepstoensurewehavethe
right capabilities and processes in place to strengthen
thevalueofourinnovationpipeline.Thatincludesa
particularfocusonensuringwedevelopproductswith
thesustainablebenefitsourcustomersarelookingfor.
»
See page 35 for more on the work our
Innovation Taskforce has done this year.
Given its importance to our strategy, the Board
continues to directly oversee Synthomer’s overall
sustainabilitywork,whichincludesreceivingquarterly
updatesfromourVP,ESG.Thisyear,theBoard
discussed the draft Climate Action Transition Plan and
preparationstoimplementtherequirementsofthe
Corporate Sustainability Reporting Directive (CSRD), and
alsoparticipatedinadetailedsessiononwateruseat
oursites.TheBoardisalsokeptregularlyappraisedof
keyinvestmentprojectsdesignedtosupportour
customers’sustainabilityagendas,fromcertificationof
key sites to offer products based on more sustainable
feedstocks,toourdownstreamcustomersusingthe
mass balance approach to track materials through the
supplychain.
It is clear to the Board that sustainability remains an
important macrotrend for our direct customers and
theendusersofourproducts,aswellasasignificant
regulatorytrend.Sincesettingoutourstrategyin2022,
sustainability considerations have become part of
Synthomer’sday-to-daybusinessplanning–informing
every discussion, from capital expenditure to
successionplanning.
A firm commitment to health and safety
Intimesofchangeorwhenmarketsarechallengingit
isparticularlyimportanttostayfocusedonourcore
values, including our commitment to the health and
safetyofourpeople.Thisremainsthefirstitemof
business at every Board meeting, and the Board takes
its responsibility for overseeing Synthomer’s safety
cultureveryseriously.
TheBoardwaspleasedtonote,thatSynthomer
achievedanotherhistoriclowinitsrecordableinjury
caserate.Thisistestamenttoourpeopleandtheir
careforoneanother.
Our process safety event rate includes considerable
variationbetweendivisionsandreflectsthemixof
chemistriesandfacilitieswenowhaveinourportfolio.
Thereisstillworktodoatourmostrecentlyacquired
sitestoacceleratetheirimprovement.Ourdiscussions
continue to be informed by regular, detailed reports from
ourSHEteamonnearmisses–aleadingindicatorof
thestrengthofacompany’ssafetyculture.These
reports provide invaluable information that help the
Boardaskmoreinformedquestionsandunderstandthe
root-causeanalysisthattheSHEteamcarriesoutwhen
incidentsornearmissesoccur.Thisyear,theBoard
participated in a deep-dive session on near misses
associatedwith‘runaway’exo-thermicreactions,and
‘lossofcontainment’inwhichafluidleaksorescapesits
designatedcontainer.Bothareareaswhereroot-cause
analysishasidentifiedopportunitiestostrengthenthe
barriersthatwehaveinplacetopreventtheseincidents.
Diversity and inclusion: a continuing priority
Whileoursuccesshasalwaysreliedonourtalented
people, sharpening our focus on innovation and
sustainabilitywillrequireevengreaterlevelsofcreativity
and also representation of both our direct and end
customers.Oneofthebestwaystodothatistosupport
andencouragediversityandinclusioninallitsforms.
ThisimportanttopicisoneofSynthomer’sfivestrategic
pillars,withourgenderdiversitytargetanintegralpart
ofourVision2030roadmap.
The Board has supported a range of actions in this area,
both indirectly through challenging the management
teamandonamoredirect,personallevel.Forexample,
a number of Executive and Non-Executive Directors
participatedinaGroup-widepanelonwomenin
leadershipinSeptember2024,andinJanuary2024the
CompanysigneduptotheUN’sWomen’sEmpowerment
Principles.Werecognisethatsignificantchangetakes
time, particularly in a manufacturing business in an
historicallymale-dominatedindustry,sowewillcontinue
tofocusonthisarea.
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The Board’s year continued
Renewing the Board
As outlined on pages 95 to 97, our Nomination
Committee has devoted considerable time to Board
changes this year, including the appointment of Peter
Hill, CBE as an Independent Non-Executive Director and
Chairdesignatewitheffectfrom1September2024,
succeedingCarolineJohnstoneasChairoftheBoard
on1January2025.WewelcomedUweHalderasaNon-
Independent Non-Executive Director in September 2024,
whileinJuly2024,TheHon.AlexanderCattoadvised
theBoardthatheintendstostepdownasaDirector
byournextAGMinMay2025andinMarch2025our
Senior Independent Director, Ian Tyler advised his
intentiontostanddownfromtheBoardinthesecond
halfof2025,withanactualleavingdatetobeagreed
andannouncedinduecourse.Duringthesechanges,
the Board has continued to receive updates from the
NominationCommitteeonitsworktoensurewehave
therightmixofskillsandexperienceonourBoard.
»
We provide more detail on these changes and
on Board-level diversity in our Nomination
Committee report on page 95.
Hearing from our stakeholders
Understandingwhatourstakeholdersthinkandexpect
of Synthomer remains an important consideration in our
decisionmaking.Weprovidemoredetailonhowthe
Boardhasengagedwithdifferentstakeholdergroupsin
our section 172 statement on pages 76 to 81, but key
events include:
• •
A full Board visit to multiple manufacturing and other
keysitesintheUSAinJune2024.Thevisitsfocused
oneffortstobroadenourproductrangewhile
enhancingtheoverallefficiencyofourextensive
manufacturing footprint in North America
• •
NewquarterlyupdatesontheGroup’s
peoplepriorities
• •
Reviewinganddiscussingtheresultsofour2024
YourVoiceemployeeengagementsurvey,which
highlightedasignificantimprovementinoverall
engagementsincethelastsurveyin2021–despite
thesignificantchallengesfacedbytheCompanyand
thewidersector–andanumberofopportunitiesto
strengthen our offering to employees
• •
Our Board-level Employee Voice engagement
initiative gives Board members the opportunity to
activelyengagewithourpeople.Thisyear,Board
members held 11 face-to-face and virtual meetings
across Asia, Europe and the USA
• •
A‘showandtell’presentationfromgraduates
participating in our popular graduate development
programme.Theeventwasachanceforthe
graduates to talk directly to Board members and
sharetheirexperiencesoftheprogramme.Inturn,
the session helped the Board understand the
important role the programme plays in supporting
home-growntalentdevelopment,skillsgrowthand
succession planning
• •
Engagementwithshareholdersonourremuneration
policy.Thesewereproductive,wide-ranging
discussionsduringwhichshareholdersindicated
their support for our management team and
strategyandtheirrecognitionofthedifficult
marketconditionsweface.Weprovidemore
detailontheseconversationsonpages98 to 100.
»
Read more about how the Board engages with
stakeholders on pages 76 to 81.
Delivery in 2024 against key recommendations from 2023 external Board performance review
Recommendation Action
Horizon-scanning workshop should verify opportunities
aswell as threats.
Two ‘horizon-scanning’ sessions conducted in 2024 – one
focused on geopolitics, and the other on key megatrends.
The sessions were facilitated by outside experts and
considered both opportunities and threats.
Refine how the Board will assess progress in each pillar
ofthe strategy and around end-market orientation,
sustainability, innovation, strong geographic presence,
reduced complexity and robust financial performance (KPIs).
Reviewed all Board reporting to ensure alignment
withkey strategic objectives.
Consider each division’s and function’s ability to innovate
and manage capacity in line with market trends and future
strategic needs.
Established the Innovation Taskforce to consider
ourapproach to and governance of innovation
andsustainability.
Review recent change management across the business
for lessons learnt: timely delivery, cost management,
benefits realisation.
Addressed at each regular SynEx Board update through
2024, along with how benefits are tracked, reported and
traced to results, including cost savings.
Regularly review the people agenda to assess
implementation of the four strategic employee priorities.
Quarterly people update to Board to address progress
on four strategic employee priorities and on employee
engagement.
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Board and Committee meeting attendance
Board Audit Remuneration Nomination Disclosure
Peter Hill, CBE
3
2/2 1/1
Michael Willome 9/9 4/4 4/4 6/6 8/8
Lily Liu 9/9 4/4 4/4 6/6 8/8
Alexander Catto 8/9 5/6
Martina Flöel 8/9 3/4 3/4 5/6
Roberto Gualdoni 8/9 4/4 4/4 5/6
Uwe Halder
4
2/2 1/1
Lee Hau Hian 9/9 6/6
Ian Tyler 9/9 4/4 4/4 6/6 8/8
Holly Van Deursen 9/9 4/4 4/4 6/6
Gender diversity
Female 5-10 years
British
Male 0-5 years
Ethnic diversity
Asian White
Nationality
German
Board tenure
1 LilyLiuholdsdualBritishandAustraliancitizenship.
2 RobertoGualdoniholdsdualGermanandItaliancitizenship.
3 PeterHill,CBEjoinedasanIndependentNon-ExecutiveDirectorinSeptember2024andbecameChairon1January2025.
4 UweHalderjoinedinSeptember2024.
International 7
Strategy/M&A 8
CEO/Board leadership 7
People/culture/change 7
Finance/investment 7
PLC governance 5
Risk 6
Chemicals 7
Broader industrials 7
SHE/regulatory 6
Sales/marketing 6
Innovation 5
Supply chain 6
Sustainability 5
Digital 5
Weaskedour10Directorstoratethemselvesoneachof28skills.Forsimplicity,wegrouped
thoseskillsintothe15categoriesabove.Foreachcategory,weaddeduptheratingpoints
and divided the result by the total possible points available for that category to represent an
approximatenumberofDirectorswithskillsinthatcategory.
Individual Directors’ skills
The Board at a glance
American British/
Australian
1
German/
Italian
2
Malaysian Swiss
>10 years
Chair
Board composition
Non-Executive DirectorsExecutive Directors Independent Non-Executive Directors
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Our Board of Directors
Peter Hill, CBE
Chair
Nationality British
Appointed to the BoardSeptember2024;
appointedChairfrom1January2025
Key expertiseInternational,strategy/M&A,
people/culture/change,PLCgovernance,
risk,chemicals,broaderindustrials
Background
Peter has strong public company governance and
international manufacturing experience in a range of
industries.HewaspreviouslychairofKellerGroupplc,
Petra Diamonds Limited, Volution Group plc, Imagination
Technologies plc and the speciality chemicals company
Alentplc.PeterwaschiefexecutiveofficerofLairdplc
from 2002 to late 2011, and previously held senior roles
atBTRplc,InvensysplcandCostainGroupplc.
External appointments
Non-executive chair of The Nuclear Decommissioning
Authority, a UK Government arm’s-length body sponsored
by the Department for Energy Security and Net Zero
Michael Willome
Chief Executive Officer
NationalitySwiss
Appointed to the Board November 2021
Key expertise International,
strategy/M&A,people/culture/change,
PLCgovernance,chemicals,sales/marketing
Background
Michael has a track record of driving performance
through strong operational management and strategic
actions,includingM&A.HewaspreviouslyCEOof
ConzzetaAG(nowBystronicAG)inZurich,andspent
18yearswithClariantAG,leadingitsglobalindustrial
andconsumerspecialitiesdivision.Beforethat,heheld
leadershiprolesinAsia-Pacific,basedinHongKong,
andinCanadaandTürkiye.
External appointments
Non-executivedirectorofGlastonOyj(NasdaqHelsinki),
sits on subsidiary boards of the Indutrade Group
Lily Liu
Chief Financial Officer
Nationality British, Australian
Appointed to the BoardJuly2022
Key expertise International,
strategy/M&A,finance/investment,
PLC governance, risk, broader industrials
Background
LilyisahighlyexperiencedCFO.Shehasworkedinthe
manufacturing and engineering sectors for more than
20years,andjoinedSynthomerfromEssentraplc,
aFTSE250componentsandsolutionsbusiness,
whereshewasCFO.LilywaspreviouslyCFOatXaarplc,
aUK-listedinkjettechnologydeveloper,andSmiths
Detectionbusiness,adivisionofSmithsGroupplc.
External appointments
Non-executive director and member of the
auditcommitteeofDCCplc
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Our Board of Directors continued
The Hon. Alexander G Catto
Non-Executive Director
Nationality British
Appointed to the Board 1981
Key expertiseStrategy/M&A,
people/culture/change,PLC
governance,broaderindustrials
Background
AlexanderwasadirectorofinvestmentbanksMorgan
Grenfell&CoandthenLazardBrothers&Co.Henow
manages a private investment company and his family’s
grant-givingcharityandotherinterests.Alexanderis
Synthomer’s designated Non-Executive Director
toleadworkforceengagement.
AlexanderwillstepdownfromtheBoardattheAGM
inMay2025.
External appointments
Managing director of CairnSea Investments Limited,
aprivateinvestmentcompany
Martina Flöel
Independent Non-Executive Director
Nationality German
Appointed to the Board September 2023
Key expertiseStrategy/M&A,
people/culture/change,risk,chemicals,
SHE/regulatory,innovation
Background
Martina has considerable executive experience in the
chemicalsindustry,leadingwhatbecameOXEAGmbH
between2003and2016.Beforethis,sheheldanumber
of senior roles at Celanese AG and its predecessor
Hoechst AG, focusing on strategy, operations and
capital investment, human resources, and innovation
andtechnology.Martinabeganhercareerasaresearch
chemistandholdsaPhDinchemistry.
External appointments
Non-executive director of Sasol Limited since 2018,
andofNesteOyjfrom2017to2023
Roberto Gualdoni
Independent Non-Executive Director
Nationality German, Italian
Appointed to the BoardJuly2021
Key expertiseCEO/Boardleadership,
finance/investment,risk,chemicals,
sales/marketing,supplychain
Background
Roberto has more than 35 years’ chemicals sector
experience in both commodity and speciality segments,
mostlyatBASFSE.Thereheheldsenioroperational
roles covering international sales, marketing and
procurementandservedonanumberofjoint-venture
boards.HewaschiefexecutiveofStyrolutionforthree
yearsuntil2014,beforeitsjointventurewithBASF.
External appointments
ChairofCABBGroupGmbH,memberoftheboards
ofAeroSafeGlobalandClariantAG
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Our Board of Directors continued
Uwe Halder
Non-Executive Director
Nationality German
Appointed to the Board September 2024
Key expertiseInternational,people/culture/change,
risk,chemicals,SHE/regulatory,innovation
Background
Uwe’sentirecareerhasbeenintheglobalchemicals
industry.HeworkedintheUSAatBASFandaspresident
ofDyStarUSA,andinEuropeatCHT/BEZEMAand
ArchromabeforejoiningabusinessacquiredbyKLK
OLEO, part of the global oleochemical and manufacturing
divisionofKualaLumpurKepongBhd(KLK).
External appointments
ChiefexecutiveofficerofKLKOLEOEurope,a
subsidiaryofSynthomer’slargestshareholderKLK
Dato’ Lee Hau Hian
Non-Executive Director
Nationality Malaysian
Appointed to the Board 2002 as a Non-Executive
Director;firstjoinedtheBoardin1993andstood
downin2000tobecomeanAlternateDirector
Key expertiseStrategy/M&A,CEO/Boardleadership,
broaderindustrials,SHE/regulatory
Background
Hau Hian has experience in organisational
transformations,acquisitions,chemicalsand
manufacturingoperationsandsustainabilitymatters.
External appointments
Non-executive director of Kuala Lumpur Kepong Bhd
(KLK),whichisSynthomer’slargestshareholder;
managingdirectorofBatuKawanBhd,alisted
Malaysianinvestmentholdingcompany,which
isa47%shareholderofKLK
Ian Tyler
Senior Independent Director
Nationality British
Appointed to the BoardJune2022
Key expertiseCEO/Boardleadership,finance/
investment,PLCgovernance,risk,SHE/regulatory
Background
Ianhasextensiveboardexperienceasaformer
chiefexecutiveandasanon-executiveforseveral
internationalindustrialorganisations.Hissenior
executivecareerwasatBalfourBeattyplc,aglobal
infrastructurebusiness,whichhejoinedasfinance
directorin1996andwhereheservedaschiefexecutive
from2005to2013.
External appointments
Non-executive director and chair of Grafton Group plc,
Non-executive director and chair of the remuneration
committee of Anglo American plc, non-executive
director and chair of private companies BMT Group Ltd
andAffinityWaterLimited
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Our Board of Directors continued
Holly A Van Deursen
Independent Non-Executive Director
Nationality American
Appointed to the Board September 2018
Key expertiseInternational,people/culture/change,
risk,chemicals,SHE/regulatory,innovation
Background
Until2005,Hollywasgroupvicepresident,
petrochemicalsatBPplc.Shehasworkedinthe
globalchemicalsindustryformorethan25yearsand
held senior positions across North America, Europe
andAsia.Since2016,Hollyhasheldnon-executive
directorrolesforglobalcompaniesheadquartered
intheUSAandspent12yearsontheboardof
aNorwegian-listedcompany.
External appointments
Non-executivedirectorandchairofthetalent,culture
and compensation committee of Kimball Electronics
Inc, non-executive director of Albermarle Corporation
Anant Prakash
General Counsel and Company Secretary
Nationality British
Appointed December 2022
Background
AnantjoinedSynthomerhavingspentfiveyearsat
defence and security company Ultra Electronics Group
plc,latterlyasgeneralcounsel,EuropeandAsiaPacific.
Beforemovingintoindustry,heworkedatinternational
lawfirmSlaughterandMay,wherehedevelopedabroad
corporate,commercialandM&Apractice,including
experienceworkinginHongKongandSpain.
External appointments
Non-executive council member at City,
UniversityofLondon
Our non-independent Board members
The Board recognises the unusual nature of
havingnon-independentmembers.Thisisa
voluntary arrangement that has been in place
for40yearsandreflectsthemajorshareholdings
intheCompanythattheyrepresent.
Dato’LeeHauHianandUweHalderare
theBoard’srepresentativesforourlargest
shareholder,KLK(27%).
Hau Hian’s extensive leadership experience
inchemicalmanufacturingandexperienceof
organisationaltransformationsandacquisitions
means he offers the Board and Executive
Committeeinvaluableinsightswhenmaking
businessdecisions.Healsooffersanimportant
perspective on the Malaysian and Southeast
Asianbusinesslandscape.
UweHalderjoinedtheBoardwitheffectfrom
1September2024.Uwe’sextensiveexperience
inglobalchemicalsisasignificantbenefitto
theCompany,asishissignificantexpertise
inR&Dandinnovation,andonstrategyand
SHEmanagement.
Other Board members in 2024
CarolineJohnsonretiredfromtheBoard
andasChairinJanuary2025.
Board Committee key
Audit Committee
Remuneration Committee
Nomination Committee
Disclosure Committee
Committee Chair
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Ana Perroni Laloe
President, Coatings & Construction
Solutions, and EMEA
NationalityBrazilian
Appointed to the Executive Committee
February 2022
Background
Ana has more than 20 years’ global
salesandmarketingexperience,with
astrongtrackrecordofsuccessfully
commercialising solutions for end
markets.ShestartedhercareeratCiba
SpecialtyChemicalsinBrazil.Elected
president of RadTech South America
fortwoconsecutiveterms,Anaisone
ofthepioneersofintroducingUV
curingtechnologyintheregion.
Stephan Lynen
President, Adhesive Solutions,
andAmericas
Nationality German
Appointed to the Executive Committee
May 2023
Background
Stephan has more than 25 years’
leadership experience in the chemicals
industry, principally at Clariant AG, the
global speciality chemicals company
heworkedforinseveralcountries,
especiallyinAsia.Heleddifferent
Clariant businesses, including its
additivesunit,beforebecomingCFO.
Stephan brings experience in
commercial and operational activities,
strategy,finance,M&A,post-merger
integrationandtransformation.
Rob Tupker
President, Health & Protection and
Performance Materials, and Asia
Nationality Dutch
Appointed to the Executive Committee
September 2018
Background
RobwaspreviouslywithHoneywell
InternationalInc,whereheheldavariety
of senior business leadership positions
in its performance materials and home
andbuildingtechnologiesdivisions.
Beforethat,heworkedwithSüd-Chemie
(nowClariantAG)andUnilever/ICI’s
(nowGivaudanSA’s)flavourandfragrance
division.Robworkedforsevenyearsin
Asia-Pacific,fiveyearsintheUSAand
20yearsacrossEurope,withaconsistent
focusongrowingandtransforming
global businesses in the chemical
andprocessindustry.
Jan Chalmovsky
President, Strategy and M&A
Nationality German
Appointed to the Executive Committee
September 2022
Background
Janhasmorethan15years’experience
instrategyandmergersandacquisitions,
most recently as head of strategy and
M&Aatglobalindustrialcompany
ConzzetaAG(nowBystronicAG).Before
that,hespentnineyearsatMcKinsey&
Company, including as an associate
partner, focusing on strategy, corporate
transformationsandcorporatefinance.
Our Executive Committee
Other Executive Committee membersin 2024
AliceHeezenleftasChiefHumanResourcesOfficerinOctober2024.TheCompany
isactivelyseekingasuitablereplacement.Intheinterim,theHumanResources
teamisbeingledbyAnantPrakash,GeneralCounselandCompanySecretary.
Biographies for Michael Willome,
Lily Liu and Anant Prakash can
befound on pages 70 and 73.
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Our governance framework is designed to focus the Board on setting the
Group’s purpose, values and strategy, on monitoring performance and on
ensuring sound governance, including appropriate controls and balanced
risk assessment.
WedelegatecertainoversightandmanagementresponsibilitiestovariousCommittees.
Executive management is responsible for implementing strategy and leading our
colleaguesacrosstheGrouptodeliverthatstrategy.
AsaUK-listedcompany,wefollowtheUKCorporateGovernanceCodeandsohave
anestablishedgovernancestructure.Formoredetailabouthowweapplyitsprinciples
andcomplywithitsprovisions,seepages82 to 86.
Our Board Committees and management committees
Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
Disclosure
Committee
Executive
Committee
Executive
Sustainability
Steering
Committee
Executive Risk
Committee
Board Committees
Management committees
OurDisclosureCommitteesupportstheBoardandmonitorscompliancewith
disclosure controls and procedures for material information, and is responsible for
identifyinginsideinformation.ItcomprisestheChair,SeniorIndependentDirector,
CEOandCFO,whomeetaftereachscheduledBoardmeeting,andisadvisedbythe
GeneralCounselandCompanySecretaryandtheVicePresident,InvestorRelations.
TheCommittee’stermsofreferenceareavailableonourwebsite.
The Company’s progress against our sustainability strategy, Vision 2030 targets
and2050netzeropledgeisundertheBoard’sdirectsupervision.Giventhatthese
environmental, social and governance (ESG) matters are a key part of our strategy,
wewanttoclearlyshowthattheBoardretainsultimateoversightof,andresponsibility
for,deliveringagainstourstatedESGgoals.
At the Executive Committee level, in 2022 Synthomer formed the Executive
SustainabilitySteeringCommittee.ItischairedbytheCEO,meetsquarterlyandis
attendedbythefullExecutiveCommittee.Itoverseesouroverallsustainabilityagenda
andprogressoneachofourVision2030sustainabilitygoals.Thesegoalsareowned
andsponsoredbyanExecutiveCommitteemember,whoisresponsibleformaking
surewehavetherightplansinplacetodeliverwithinthetimeframe.
TheCompanyalsohasanExecutiveRiskCommittee,whichhasbeeninplace
since2022.ThisCommitteeischairedbytheCFOandensuresarobustprocessfor
identifying,prioritising,managingandcontrollingsignificantrisksaffectingtheGroup.
It is attended by the full Executive Committee and the Group Internal Audit and Risk
Director.ItmakessuretheGrouphasriskmanagementpoliciesandproceduresin
place–includingthosecoveringprojectgovernance,sanctions,crisismanagement,
humanrights,businesscontinuityandbusinessmanagement.SeeHowwemanage
risk on pages 45 to 48.
All Executive Committee members also attend a substantial number of our Board
meetings,exceptwhencertainsensitivemattersarediscussed.AsaBoard,wehave
debatedthisapproachandcontinuetobelievethatthisprovidesuswithgreatinsight
intothebusiness.Itallowsdeeperdiscussionanddirectchallengetoourdifferent
businessesandpromotesaunifiedapproachtoimplementinggovernanceand
strategy.WecontinuetohavestrongpositivefeedbackfromBoardmembers–new
andcontinuing–andExecutiveCommitteemembersonthisapproach.Formore
details, see The Board’s year on pages 65 to 68.
»
For more information on our Board Committees and their work this year,
seethe Committee reports from pages 87 to 116 and on our website. A table
of Directors’ attendance at Committee meetings can be found on page 69.
Ourgovernanceframework
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HowtheBoardengages(s.172compliance)
Understanding the issues that are important to
our stakeholders is essential to how we develop
and implement our business strategy. It is also
critical to our long-term success.
Our approach to Section 172
OurSection172statementdescribeshowtheBoardhas
carried out its responsibility to promote the success of
the Company, recognising that the key decisions it
makestodaywillaffectlong-termperformance.The
statement considers paragraphs (a) to (f) of Section
172(1) of the Companies Act 2006 and includes details
abouthowtheBoardhasconsideredandengagedwith
stakeholders.
When making decisions, the Board considers the needs
ofourdifferentstakeholdergroupsaswellasthelikely
consequencesthatanyactiontakenmighthavefor
Synthomer’sreputation.TheBoardreceivespapersthat
includeSection172information,whichitusestoinform
strategic discussions, including any implications for the
resilience of our business and the potential impact on
ourcommunityandenvironment.ItistheChair’s
responsibility to ensure that the Board considers
Section172whenmakingitsdecisions.
Werecognisethatitisnotalwayspossibletoprovide
apositiveoutcomeforallstakeholdersandthat,
sometimes, the Board has to make decisions based on
competingpriorities.TheBoardregularlyassessesthe
outcomes of its decisions and is available to talk to
stakeholders.ThisengagementhelpstheBoardto
betterunderstandwhatmattersmosttoour
stakeholders and supports discussion of relevant
issues.ItalsohelpstheBoardchoosethecourseof
action that best leads to high standards of business
conductandsuccessforSynthomerinthelongterm.
Stakeholder engagement in 2024
We made no changes to our list of key stakeholders this
year,whichwesetoutonpages78 to 81, alongside a
discussionofhowweengagedwithandrespondedto
themintheyear.
The Board has continued to ensure it understands,
andconsiders,theissuesthatmattermosttoall
ourstakeholdergroups,particularlywhenmaking
keydecisions.
We consider our understanding of the sustainability
issues that matter most to our stakeholders through
periodicmaterialityassessments.Thisyearweupdated
our2021materialityassessmentwithourfirst‘double’
materialityassessment(DMA).Thisrequiresustoassess
the actual or potential effects of our operations on people
andtheplanet,aswellashowsustainabilityissues
mightaffectourfinancialperformanceandposition.
»
We explain more about the assessment and
its findings on page 30.
Principal decisions in 2024
AsaBoard,wemadeanumberofsignificantdecisions
thisyear.Herewesetouthowweconsideredour
stakeholdersandSection172obligationswhenmaking
threeofthosedecisions.
Approving the divestment of the Compounds business
In April 2024, the Board agreed to divest the Group’s
Compounds business to Matco Latex Services BV,
resultinginanetcashinflowof£19.6m.
How the Board made its decision
AspartofastrategicreviewoftheGroupin2022,
management extensively analysed our portfolio of
businesses.Thisinvolveddetailedmarketanalyses–
withsupportandchallengefromanexternalstrategic
adviser–andanassessmentoftheGroup’smarket
positionspluscurrentandfuturepotential,aswellas
likelycapitalrequirements.
TheCompoundsbusiness,whichwaspartofthe
Group’sHealth&ProtectionandPerformanceMaterials
divisionandcomprisedtwomanufacturingsitesinthe
NetherlandsandoneinEgypt,wasdesignatedas
non-coretotheGroupaspartofthatreview.
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HowtheBoardengages(s.172compliance)continued
The Board considered the forecasts for the Compounds
business, and challenged management to see if there
wasanyscopetore-categorisethebusinessas‘core’to
ourstrategy.Followingdiscussion,weconcludedthat
thedecisiontodivesttheCompoundsbusinessfitted
theGroup’sstrategytoincreaseitsspecialityweighting,
reduce the complexity of our site portfolio, and enhance
theGroup’sfocusonhigher-value,higher-growth
marketswherewehavestrongandsustainable
leadershippositions.
Withthisinmind,weconsidereditinthebest
overallinterestsofstakeholderstodivestthe
Compoundsbusiness.
Approving a new technology partnership
In2024,theBoardapprovedamulti-year,zero-capital
technology partnership in the US domestic glove
manufacturingmarkettocapitaliseonHealth&
Protection’s intellectual property, technology and
manufacturingexpertise.
How the Board made its decision
ManagementdiscussedwiththeBoardapotential
opportunitytodevelopasignificant,zero-capital
technology partnership for the US domestic medical
glovesmarket.Thismarkethasevolvedrapidly,partly
because of the procurement policies under both the
current and previous US federal administration
whicharedesignedtosupportgrowthofonshore
manufacturingofpersonalprotectiveequipment.
TheBoardengageddeeplywithmanagementto
understand the potential opportunity, including
considering the US glove market, the structure of any
partnership,andthepotentialrisksandopportunities
ofenteringone.TheBoardalsoconsideredalternatives,
such as investing directly into the North American
market, continuing to supply the North American market
through our other nitrile latex manufacturing sites in
Filago, Italy, and Pasir Gudang, Malaysia, or creating
aformaljointventurewithaUScounterparty.
Afterdiscussingandreviewingtheproposedfinal
commercial and legal terms, the Board approved
Synthomer’s entry into the technology partnership,
consideringitagoodwayfortheGrouptodrawonits
deepexpertise,anddevelopnewrelationshipswithout
significantcapitalinvestment.
Refinancing the corporate bond
In April 2024, the Board approved the issuance of a
€350mbond,duein2029,andatenderfor€370mof
thebonddue2025,reducinggrossdebtandextending
Synthomer’smaturityprofile.
How the Board made its decision
In2023,theBoardwasawareofthematurityofthe
Group’s€520mbond,dueinmid-2025,whichithad
anticipatedwouldberefinancedduringthecourse
of2024.
TheBoardchallengedwhetherthesize,structure
andtimingofthebondrefinancingwasappropriatein
Q12024.Italsodiscussedthekeyrisksofrefinancing
thebondwithmanagement,andsetbondpricing
parameterstokeepaclosewatchonthecoupon
achievedforthenewbond.
Wealsoreflectedonthepotentialdisruptiontothe
businesscausedbyrefinancingthebond.Giventhatthe
responsibilitywouldlargelyfalltoseniormanagement
andhead-officestaff,andthatitwasanecessarystepin
theshort-to-mediumterm,weconcludedthatlaunching
thebondrefinancinginApril2024wasinthebestoverall
interestsofinvestors,employeesandotherstakeholders.
»
Find out more about these decisions on
pages13 to 14.
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HowtheBoardengages(s.172compliance)continued
Our key stakeholder groups
Customers
We work with more than 6,000 customers worldwide, providing the products and solutions they need to serve their own
customers in a range of end markets.
How the Board engaged
• •
The Executive Committee attended part of all scheduled Board meetings, and divisional presidents provided customer-related information
tothe Board.
• •
We received deep-dive AS business updates at each scheduled Board meeting, and held deep-dive HPPM and CCS working sessions during
theyear, as part of which the divisional presidents provided in-depth market intelligence and customer feedback.
• •
We received reports from management about their engagement with customers across the business. These reports were especially important
given the ongoing volatility and lack of visibility across the chemicals industry and our end markets.
• •
We also received regular reports about ongoing SynEx projects, which focused on commercial and operational excellence.
How the Board responded
• •
Given that a number of areas of our business continue to see soft demand, we supported management’s focus on improved reporting,
forecasting and innovation to strengthen customer relationships.
• •
We also reviewed and discussed ongoing operational changes needed to optimise production and costs – including plant capacity,
shiftplanning and headcount reduction.
• •
Having held our annual deep-dive strategy review, we reaffirmed our commitment to the strategy announced in 2022, which focuses
ongettingcloser to our customers and growing, principally organically, in attractive end markets.
• •
Members of the Board are part of Synthomer’s new Innovation Taskforce, chaired by our non-executive director Roberto Gualdoni.
Employees
Our success relies on the talent of our more than 4,000 entrepreneurial and highly skilled employees. We want to foster a
culture that values diversity and inclusion, fairness and transparency.
How the Board engaged
• •
In 2024, the full Board visited our Chester, Roebuck, Jefferson Hills, and Mogadore sites, the Akron Technical Centre, and the Beachwood office
in the USA.
• •
Employees across the sites appreciated the opportunity to engage directly with Board members – especially at sites that recently joined the
Group through acquisition.
• •
The Board received regular reports about our Employee Voice programme and quarterly updates on our people priorities and support. We also
received summaries of management townhalls held across the business, and of the annual GLT meeting.
• •
The Board received a new report summarising the status of our graduate programmme. This was combined with a ‘show and tell’ session at our
headquarters in London, giving six graduates the opportunity to meet Board members and share their experiences.
Employee Voice programme
• •
Every year, our designated Non-Executive Director for workforce engagement, Alexander Catto, supported by Holly Van Deursen, carries out a
comprehensive programme of Employee Voice engagement sessions on behalf of the Board (see page 36 for more detail).
• •
Alexander and Holly hear from groups across different businesses and geographies, in person and by video. In 2024, they held sessions with
11employee groups, the majority in person, with 132 employees in China, the Czech Republic and North America attending. They talked to
cross-functional groups with varied experience levels and tenure, in groups of eight to 15 employees so they could exchange ideas with every
employee in the room. The purpose of these sessions was to get a clear understanding of what was on employees’ minds and to have an open
discussion about what it is like to work at Synthomer.
• •
Alexander and Holly report back to the Board about the themes of their discussions, and we receive a summary of actions taken by site leaders
in response to the feedback.
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HowtheBoardengages(s.172compliance)continued
Employees continued
How the Board responded
• •
On our visits to the various USA sites, we heard from a wide range of employees, who showed their innovative thinking to develop stronger
customer relationships and an entrepreneurial mindset. We were impressed by the teams’ positivity and tenacity in responding to the
challenges of recent years.
• •
These broader Board interactions with employees supported our Board decisions on talent management through 2024.
Employee Voice programme
What our colleagues value most
• •
We continue to hear from employees that Synthomer’s focus on safety, health and the environment is motivating and differentiating compared
to many of our peers.
• •
We also heard that the opportunity to work across a global organisation, with exposure to new technical, customer, market and team
challenges, creates an enriching professional experience and opportunity to develop new skills.
• •
A regular theme is that supportive team members create a sense of belonging where employees feel their views are heard.
Employees’ ideas for change
• •
Employees shared their ideas for improvements in maintenance and succession planning (including plant operators), for better networking and
knowledge sharing, for new approaches to hiring talent in a market downturn, for simplifying our business processes and technology systems,
and for how we continue to improve communication with employees.
Employee Voice discussions in action
• •
In 2024, our HR team and divisional and site leadership teams followed up on employees’ feedback in 2023, including developing a new
Group-wide reward and recognition programme. This year, employee feedback also contributed to ongoing work to develop the internal
communications strategy – with more enhancements planned for 2025 – and strengthening Synthomer’s DE&I agenda.
Communities
We want the communities who live near our sites to see us as a good neighbour.
How the Board engaged
• •
The health and safety of our people and local communities is critically important, and updates on this area of activity are always the first item
of business at every Board meeting.
• •
The Board receives updates from divisional leaders about developments that affect communities around our sites.
How the Board responded
• •
We continued to monitor and challenge how management implements the SHE management system at all our sites.
• •
The Board continues to support the work of the Synthomer Foundation and a range of community projects local to our sites.
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HowtheBoardengages(s.172compliance)continued
Suppliers
Our suppliers deliver the raw materials and services we need to make our products. We look for ways to work in partnership
with suppliers to create a more sustainable supply chain.
How the Board engaged
• •
Management kept us informed about how it was engaging with utility suppliers and site hosts as it worked to reduce operational risks.
• •
The Board received updates on the Group’s engagement with suppliers and customers on whole-value-chain approaches to decarbonisation,
including Synthomer’s new partnership aimed at manufacturing bio-based nitrile latexes for the glove industry using responsibly sourced
bio-based feedstock.
• •
The Board was updated about the action plan following the cross-business study of our carbon footprint and our other engagement with our
supply chain, including our ongoing participation in the cross-industry Together for Sustainability (TfS) procurement initiative.
How the Board responded
• •
Through feedback from the Group’s direct and indirect engagement with suppliers this year, we continued to broaden our understanding of
what is important to them and to deepen our relationships, particularly around sustainability.
Investors
As a public company listed on the London Stock Exchange, we aim to deliver sustainable financial performance and long-term
value creation for our investors.
How the Board engaged
• •
Following the voting outcome at our AGM in May 2024, Board members including the Chair of the Remuneration Committee Holly Van Deursen
engaged with a number of our key shareholders in relation to the remuneration decisions made in respect of the 2023 financial year, as
described in more detail on page 98.
• •
The CEO and CFO updated us about their meetings with investors, and our Vice President, Investor Relations shared IR developments at every
Board meeting.
• •
Before each meeting, the Board received analysts’ forecasts and consensus for financial performance, plus a summary of the externally
prepared shareholder analysis report, showing our top 20 shareholders and their movements, alongside top buyers and sellers.
• •
Analysts’ reports and notes are shared with the Board as they are issued.
• •
We held an in-person Annual General Meeting in May 2024. We kept in place the option for shareholders to submit questions in advance of the
meeting, which we introduced during the pandemic.
• •
We also have regular correspondence with investors, responding to suggestions and queries, and Board members make themselves available
to shareholders.
Proxy advisers
• •
In addition to major shareholders, we also sought to engage with proxy advisers when consulting with shareholders on the Remuneration report.
How the Board responded
• •
The Board and Remuneration Committee reflected on feedback received through shareholder engagement, and carefully considered it when
determining both the 2024 remuneration outcomes and the 2025 performance metrics – aiming to balance challenge and motivation for our
executives while delivering outcomes that align with the interests of our stakeholders.
• •
Board engagement with investors encompassed how management is addressing the very challenging economic environment and how it is
progressing operational issues in AS.
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HowtheBoardengages(s.172compliance)continued
Investors continued
How the Board responded Proxy advisers
• •
The Board and Remuneration Committee reflected on proxy advisers’ comments, and reviewed our disclosures for 2024 and for future years.
• •
Most proxy advisers recognise that governance over environmental and social matters continues to evolve. One proxy adviser requires a
separate board committee for ESG but, in 2023, we formally reserved ESG matters for the whole Board, as described on page 67 – although we
will keep this under review in 2025. One proxy adviser also noted that, in the 2023 Annual Report, the Company did not disclose use of electric-
only UK private jet flights from 2025 – we do not expect to use any UK private jet flights.
Governments
andauthorities
As a member of the chemicals industry and scientific community, it is important we engage on issues such as policy,
education and skills, compliance and collaboration.
How the Board engaged
• •
We engaged with legislative and regulatory processes through our membership of industry groups in the UK, Europe and the USA.
• •
We received reports on the changing regulatory landscape, including in respect of proxy adviser guidance, various consultations, sustainability
reporting, and broader corporate governance themes.
• •
We also received two reports during the year about legal compliance with operational laws and regulations at our sites.
How the Board responded
• •
The Board continued to oversee the Company’s processes and procedures to comply with all relevant laws and regulations.
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CompliancewiththeCode
Here we set out how we applied the principles
ofthe UK Corporate Governance Code (Code)
in2024.
WecompliedwithalltheCode’sprovisionsfromthe
startof2024untilthedateofthisreportexcepttwo:
Provision 11 states that at least half the Board,
excluding the Chair, should be Independent Non-
ExecutiveDirectors.Wecompliedwiththisprovision
throughout2024–fromJanuary2024untilSeptember
2024theBoardwascomprisedoftwoExecutive
Directors,twonon-independentNon-Executive
Directors, and four Independent Non-Executive
Directors,alongsidetheChair.
FromSeptember2024–whenwecompletedPeterHill,
CBE’s recruitment as an Independent Non-Executive
DirectorandUweHalderwasappointedasanon-
independentNon-ExecutiveDirector–until
31December2024wehadtwoExecutiveDirectors,
1 Board leadership and Company purpose
A The role of the Board The Board continues to lead the Group’s strategic direction and long-term objectives. The Board’s year on pages 65
to 68 sets out the Board’s main activities and outcomes for 2024 and shows how it provided strong governance,
challenge and support to the business.
The Board met nine times during 2024, and all Directors continue to act in what they consider to be the best
interests of the Company, consistent with their statutory duties.
B The Company’s purpose, values and strategy Our purpose is to create innovative and sustainable solutions for the benefit of customers and society.
Our culture – including an overview of our values and how the Board ensures alignment with our purpose,
values and strategy – is described on pages 65 to 68.
C Resources The Board delegates allocation of day-to-day resources to management through the CEO and the Executive Committee.
We regularly discuss resourcing with the Executive Committee and the CEO, challenging, for example, resource
allocation across our divisions and functions in line with the differentiated steering pillar of our strategy.
threenon-independentNon-ExecutiveDirectorsandfive
Independent Non-Executive Directors, alongside the
Chair.On1January2025CarolineJohnsonresignedas
ChairandfromtheBoardandPeterHill,CBEwas
appointedasChair.
As at the date of this report, the Board therefore
comprisestwoExecutiveDirectors,threenon-
independent Non-Executive Directors, and four
Independent Non-Executive Directors, alongside the
Chair.TheBoardandNominationCommitteereflected
onthissituationandconsideredconflictsandwhether
anyonegroupcoulddominatedecisions.Wewere
satisfiedthatthiswasnotthecase.AlexanderCattowill
stepdownatthenextAGMinMay2025,atwhichpoint
theBoardwillagaincomplywithProvision11pending
IanTyler’sdeparturebytheendof2025.TheBoardand
Nomination Committee are making arrangements to
recruitnewmemberstotheBoardtoaddressthis.
Provision 19 states that the Chair should not remain in
postbeyondnineyearsfromfirstbeingappointedtothe
Board.CarolineJohnstonereachedhernine-yeartenure
inMarch2024.TheBoardextendedhertenurefora
shorttimewhilerecruitinghersuccessor,PeterHill,
CBE.CarolineresignedasChairandfromtheBoardin
January2025.
TheCodeisavailableinfullontheFRC’swebsiteat
frc.org.uk and should be read alongside our Strategic
andGovernancereports.
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CompliancewiththeCodecontinued
1 Board leadership and Company purpose continued
D Shareholders and stakeholders The Board engaged actively throughout 2024 with shareholders and other stakeholders (as described on pages
76to81). The Chair held a number of meetings with our largest corporate shareholder and with some of our major
institutional shareholders to discuss the role of the Board and other general governance issues, and reported back
tothe Board.
The CEO and CFO met extensively with new and existing shareholders through regular trading updates and as part
ofthe rights issue process.
The Board continues to review its mechanism for workforce engagement, as required by Provision 5 of the Code.
AlexanderCatto was appointed as designated Non-Executive Director for employee engagement, given his interest in
all people matters at Synthomer over many years. Holly Van Deursen, our Remuneration Committee Chair, supports
Alexander in this role and, being based in the USA, has proved very effective in reaching more parts of our business.
Holly also has extensive people leadership roles in the chemicals industry.
The Board concluded that the employee engagement programme adds value and insight both to the Board and to
executive management, and we regularly reflect on employee views during Board deliberations. We have also had
feedback that colleagues feel the direct engagement with a Board member promotes open and inclusive discussions
and valuable feedback. More details of our Board employee engagement are set out on pages 78 to 79.
E Workforce policies and practices The Board oversees the Group’s workforce policies and practices and delegates day-to-day responsibility to the
CEOand Chief Human Resources Officer to make sure they are consistent with the Company’s values and support
its long-term success.
Employees are able to report matters of concern confidentially through our dedicated and independent
whistleblowing hotline. The Board and/or Audit Committee routinely reviews reports from the hotline,
whichsummarise calls and ensure cases can be investigated and followed up as appropriate.
2 Division of responsibilities
F The Chair Caroline Johnstone led the operation and governance of the Board and its Committees in 2024. The Chair was
inpost from December 2020, having joined the Board as an Independent Non-Executive Director in March 2015.
Peter Hill, CBE took over from Caroline as Chair in January 2025.
Chair tenure and succession is discussed in the Nomination Committee report on pages 95 to 97. The Senior
Independent Director completed an annual review of the Chair’s performance, which is also discussed in the
Nomination Committee report.
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CompliancewiththeCodecontinued
2 Division of responsibilities continued
G Board composition The Nomination Committee regularly reviews the size and composition of the Board and its Committees to ensure
theappropriate combination of Executive and Non-Executive Directors.
Provision 10 of the Code considers the independence of Non-Executive Directors and circumstances that might impair
their independence, including holding office for more than nine years. Provision 11 states that at least half the Board,
excluding the Chair, should be Independent Non-Executive Directors. We complied with this provision throughout 2024
– from January 2024 until September 2024 the Board was comprised of two Executive Directors, two non-independent
Non-Executive Directors, and four Independent Non-Executive Directors, alongside the Chair.
From September 2024 – when we completed Peter Hill, CBE’s recruitment as an Independent Non-Executive Director
and Uwe Halder was appointed as a non-independent Non-Executive Director – until 31 December 2024, we had two
Executive Directors, three non-independent Non-Executive Directors and five Independent Non-Executive Directors,
alongside the Chair. On 1 January 2025 Caroline Johnson resigned as Chair and from the Board and Peter Hill, CBE
wasappointed as Chair.
As at the date of this report the Board therefore comprises two Executive Directors, three non-independent Non-
Executive Directors, and four Independent Non-Executive Directors, alongside the Chair. The Board and Nomination
Committee reflected on this situation and considered conflicts and whether any one group could dominate decisions.
We were satisfied that this was not the case. Alexander Catto will step down at the next AGM in May 2025, at which
point the Board will again comply with Provision 11 pending Ian Tyler’s departure by the end of 2025. The Board and
Nomination Committee are making arrangements to recruit new members to the Board to address this.
H Non-Executive Directors Directors’ existing commitments are carefully reviewed before they are appointed, and regularly after that to make
sure they have sufficient time for the Group. If a Board member wishes to accept an additional substantive role,
theBoard must review and approve this.
The Board believes that Directors should be able to accept other appointments where there are no conflicts of
interest and provided that the Director is able to carry out their duties effectively. Other appointments allow
Directors to develop greater skills and experience, which the Company benefits from.
The terms of appointment for Non-Executive Directors outline the time they will be expected to commit to fulfil
theirrole. Each year, the Chair reviews the time each Non-Executive Director dedicates to the Company as part of the
internal performance review of Directors – see pages 95 to 97 for more details. We are satisfied that their other
duties and time commitments do not conflict with those as Directors. For more details about meeting attendance,
see page 69.
The role of Senior Independent Director, fulfilled by Ian Tyler, provides a sounding board for the Chair and serves
asan intermediary for the other Directors and shareholders. Ian also led the annual performance review of the
Chair– see page 97.
Either after or before each Board meeting, Non-Executive Directors and the Chair meet without Executive Directors
being present.
I Policies, processes, information and resources The Chair and Company Secretary ensure that the Board and its Committees have the necessary policies and
processes in place and that they receive timely, accurate and clear information. The Board and its Committees
alsohave access to the Company Secretary, independent advice and other necessary resources at the
Company’sexpense.
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CompliancewiththeCodecontinued
3 Composition, succession and evaluation
J Appointments The Nomination Committee considers succession plans in line with evolving strategy, business requirements, tenure
and diversity. The overall process of appointing and removing Directors is overseen by the Board as a whole, through
the Nomination Committee. All our Directors retire and seek election or re-election at each Annual General Meeting.
The Nomination Committee also supports the Board in succession planning for senior management.
K Skills A key part of Board succession planning is a regular review of Board skills, which the Nomination Committee
doeseach year – see pages 95 to 97.
The Chair and Company Secretary ensure that new Directors receive a full induction (see page 96), and that all
Directors continually update their skills and have the requisite knowledge and familiarity with the Group to fulfil
theirrole.
The Executive and Non-Executive Directors have significant commercial, financial and operational experience of
themarkets and sectors within which the Group operates, as well as wider industry. Their diverse range of skills
andleadership experience enables them to monitor the performance of the management team and provide
constructive challenge and support to them.
L Annual performance review The Board undertakes either an internal or external annual Board effectiveness review.
Provision 21 of the Code states that an externally facilitated Board performance review should take place at least
every threeyears. Our last external Board performance review was carried out in 2023.
An internal performance review, including a review of all Directors, took place in December 2024 (see pages 95 to 97).
4 Audit, risk and internal control
M Audit functions All members of the Audit Committee are Independent Non-Executive Directors. Ian Tyler, the Chair of the Committee,
has recent and relevant financial experience, and the Committee as a whole has competence relevant to the sector
in which we operate.
The Audit Committee reviewed the effectiveness of the Group’s Internal Audit function and also assessed external
auditor PwC LLP’s performance during 2024, including its independence, effectiveness and objectivity. For details
of these reviews, see the Audit Committee report on pages 87 to 94.
N Assessment of the Company’s position
andprospects
The Board considers the Annual Report, taken as a whole, to be fair, balanced and understandable and to provide the
information necessary for shareholders to assess the Group’s position, performance, business model and strategy.
Its Statement of Directors’ responsibilities is set out on page 119. The Directors have also concluded it is appropriate
to prepare accounts treating the Group as a going concern and this is set out on pages 117 to 118.
An explanation of the Group’s performance, business model, strategy and the risks and uncertainties relating to the
Group’s prospects, including the viability of the Group, is set out in the Strategic report.
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CompliancewiththeCodecontinued
4 Audit, risk and internal control continued
O Risk management The Board determines the nature and extent of the principal risks the organisation is willing to take to achieve its
strategic objectives – it sets the risk appetite.
We carried out an assessment of the principal and emerging risks facing the Group during the year, including those
risks that would threaten the Group’s business model, future performance, solvency or liquidity and reputation.
The Board and Audit Committee monitor the Group’s risk management and internal controls systems and review
their effectiveness each year. Throughout the year, the Board has directly – and through delegated authority to the
Executive Committee, the Executive Risk Committee and the Audit Committee – overseen and reviewed all material
controls, including financial, operational and compliance controls. For more detail, see pages 45 to 48.
5 Remuneration
P Remuneration policies and practices Holly Van Deursen chairs the Remuneration Committee. Holly is a hugely experienced Non-Executive Director
andhas been chair and member of several international remuneration committees.
The Remuneration Committee is responsible for developing executive remuneration policy and determining
theremuneration packages of Directors and senior management.
Q Procedure for developing policy on executive
remuneration
Details of how the Directors’ remuneration policy was implemented in 2024 are set out on pages 98 to 100.
Provision 41 of the Code requires engagement with the workforce on how executive remuneration aligns with wider
Company pay policy. The Board’s engagement activity is diverse and includes face-to-face meetings, site visits,
attendance at employee events and virtual meetings. During the year, feedback was gathered on a wide range of
topics, including pay.
No individual Director is involved in deciding their own remuneration outcome.
R Independent judgement and discretion The Remuneration Committee has formal discretions in place in relation to outcomes under the annual bonus and
Performance Share Plan, and these are disclosed as part of the remuneration policy. The Committee may, at its
discretion, adjust the level of vesting of an award, if it considers that the outcome is not appropriate or does not
reflect the underlying financial or non-financial performance of the participant or the Group over the relevant period
or, that such a payout level is not appropriate in the context of circumstances that were unexpected or unforeseen
when the targets were set. When deciding this, the Committee may consider other factors it feels are relevant.
Information about how the Remuneration Committee considered discretion in 2024 is set out on pages 98 to 100.
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Audit Committee report: introduction from the Chair
The Audit Committee has continued to focus on
the fundamentals, making sure our processes
and controls are robust and fit for future success.
InayearinwhichSynthomerhasbeenfocusedon
thedetaileddeliveryofitsstrategyandoperational
excellence, the Audit Committee has maintained
itscommitmenttochallengingandsupporting
ourexecutivesandensuringthatoursystemsofcontrol
andgovernanceframeworksprovidevalueandstability,
ensuringthatSynthomerdeliversnow,andisinthebest
possiblepositionforwhenmarketsimprove.
In the short term, that includes ensuring the executive
team have the processes they need to continue
deliveringthestrategy.Italsoincludedworktorefresh
Synthomer’s assessment of principal risks, giving
consideration to the evolving risk landscape and
changes in the priorities and challenges faced by
thebusiness.
A robust external audit tender process
This year the Committee carried out a competitive
tender process for our external audit, inviting the ‘Big 4’
andseveralchallengerfirmstotakepart.Imeta
shortlistofthreecandidatefirmstolearnmoreabout
theirapproach.Aspartofthat,wechallengedthemto
demonstratehowtheyareusingtechnologytoimprove
thequalityandefficiencyoftheirauditsandtohelptheir
clientsgathergreaterinsights.
After careful consideration, the Committee agreed to
retainPwC.WewereimpressedbyPwC’sdepthof
knowledgeofthebusinessandourindustry,andtheir
commitmenttoquality.Wewerealsopleasedtohear
their insights on the use of technology to achieve
efficienciesandimproveauditquality.Giventhat
PwChasbeenourGroupauditorsince2012,we
knowwewillneedtohireanewfirmin2032.
We provide more detail on the tender process on
page94oftheAuditCommitteereport.
Another of the Committee’s important roles is leading
theoversightofSynthomer’sinternalauditprocesses.
ThisyearsawtheupdatingandapprovalofSynthomer’s
internal audit charter, and the expansion of Internal
Auditteam.Thisincludedthecreationandrecruitment
ofanewrole,DigitalDataManager,withaviewto
furtherleveragingdatainsights.Aswithexternalaudit,
the increasing use of technology presents a clear
opportunitytoenhancetheInternalAuditfunction.
“ The Committee has been
busythisyearensuring
thatoursystemsand
processes remain strong
andfitforpurposetohelp
Synthomer prosper as it
deliversitsstrategy.”
Ian Tyler
Audit Committee Chair
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Audit Committee report continued
Reviewing our material controls
The Committee appointed a third-party expert in
November2024tohelpusidentify,reviewandtest
Synthomer’smaterialcontrols,inlinewithProvision
29oftheupdatedUKCorporateGovernanceCode.
Oncethereviewiscomplete,wewillalsoworkwith
our partner to strengthen our controls as necessary
andensurewearereadytomakethenecessary
declarationinournextAnnualReport.
Preparing for the changing
sustainabilitylandscape
Synthomer’s sustainability reporting remains an
importantareaofreviewfortheCommittee,notleast
aswepreparefortheEU’sCorporateSustainability
ReportingDirective(CSRD).TheCommitteehasspent
asignificantamountoftimethisyearoverseeingwork
to develop our disclosures, metrics and assurance
processes.Thatincludedappointinganexternal
consultanttohelpuscarryoutourfirst‘double’
materialityassessment.Formoreinformationon
thatassessment,pleaseseethesustainability
reviewonpages26 to 31.
Ouraimthroughouthasbeentoensurewetakea
transparent,accurate,yetpragmatic,approach,which
iswhytheCommitteealsoaskedourinternalaudit
teamtoconductanin-depthreviewofourdata-
relatedprocessesandcontrols.
Positive feedback on the Committee’s
effectiveness
Iamalwaysimpressedwiththebreadthanddepth
ofexpertiseamongmyfellowCommitteemembers,
butperiodicallyitisgoodtoreviewhoweffectively
weworktogether.Sothisyearweheldaninternal
reviewofoureffectiveness,Iampleasedtonote
thatfeedbackfromthereviewwaspositive.The
Committeewasfoundtoprovideeffectiveoversight
ofexternalfinancialreportingandmaintainreasonable
oversightoftheeffectivenessofinternalcontrols.
Wewereencouragedtoenhanceourfocusonthe
disclosureofnon-financialitems.
Looking ahead
EveryoneatSynthomer–frommyfellow
Committeememberstoourcolleaguesworking
inourmanufacturingfacilities–hasdoneagreat
jobofstayingfocusedonthefundamentalsthisyear.
Wewillneedtomaintainthatfocusoverthenext
12months,andensurethatSynthomeriswellplaced
tocapitaliseonthebroadermarketrecoverywhen
itdoesmaterialise.
Ian Tyler
Chair
11 March 2025
Audit Committees andtheExternal Audit:
MinimumStandard
As part of its activities in the year, the Committee
reviewed and considered the requirements of the FRC’s
Audit Committees and the External Audit: Minimum
Standard. This became effective from 1 January 2025
as part of the UK Corporate Governance Code 2024
(Code), which was published in January 2024. We
reviewed the standard in conjunction with the Code
and the FRC’s Guidance on Audit Committees.
We believe we are compliant with the standard, which
focuses on overseeing the external audit process,
external audit tendering processes and reporting of
work performed by the Committee. Significant issues
we considered as part of our activities in the year are
detailed on pages 87 to 93, with our oversight of the
external audit and the external audit tender process
undertaken in the year detailed on pages 89 to 94.
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Audit Committee report continued
Audit Committee’s role
OntheBoard’sbehalf,wemonitortheintegrityof
financialstatements,overseetheadequacyand
effectiveness of the internal controls and risk
management processes, and lead the oversight of
theexternalandinternalaudit.Ourfulltermsof
reference are available on our website.
Committee members
Our Committee comprises four Independent Non-
ExecutiveDirectorsandischairedbyIanTyler,who
wasappointedin2022.Ourcompositioncomplies
withtheCode.
The Board considers Ian to have recent and relevant
financialexperienceinlinewithProvision24ofthe
Code, given his extensive board experience, including
asCEOandchairofFTSE250companies.Ianhasalso
been a non-executive director for several international
industrial organisations, and a FTSE 100 audit
committeechair.
Together,ourCommitteemembershaveawiderange
offinancial,operationalandcommercialexperience
acrossthechemicalsandengineeringsectors,whichis
set out on pages 69 to 73.
Committee meetings and operation
The Committee met four times during 2024 and has
metoncesincetheendofthefinancialyear.
Other Board members have a standing invitation to
attendourmeetings,unlessnotifiedotherwise.Weare
very pleased that the Chair of the Board, CEO and CFO
routinelyattendourCommitteemeetings,oftenwiththe
restoftheBoard.Ourprogrammeofriskreviewsand
updateshasalsoallowedustoinvitehigh-potential
membersofthemanagementteamtoattend.These
include senior Group Finance and Group Compliance
team members and the Group Internal Audit and
RiskDirector.
Ourexternalauditors,fromPwC,haveattendedall
meetingsoftheAuditCommittee.
Aswellasatourscheduledmeetings,theCommittee
regularlymeetswithPwCandtheGroupInternal
AuditandRiskDirectorwithoutmanagementpresent.
This provides more opportunity for open dialogue
andfeedback.
IanTyler,asCommitteeChair,alsoliaiseswith
theRemunerationCommitteeChairtodiscuss
matterssuchassettingExecutiveDirector
compensationtargets.
Beyond formal meetings, our Chair regularly meets
one-to-onewiththeCEO,CFO,GroupFinanceteam
members, the Group Internal Audit and Risk Director
andPwCtodeveloptheCommittee’sprogrammeof
workandtoreviewprogressonagreedactions.This
allowsustoexploreandunderstandkeyissuesas
theyarise–andtomakesurewehaveappropriate
information prepared on, and time to address, those
issuesinourmeetings.
Significant areas of activity
To enable the Committee and the Board to assess going
concern and viability, management set out its assumptions
andthepotentialriskstothebusiness,togetherwith
economic and business scenarios and possible
mitigations,attheMarch2025Committeemeeting.
Therewasaparticularfocusontheimpactofprolonged
demanduncertaintyinthechemicalsindustry,with
limited visibility and potential for subdued volumes, and
the impact of the Group’s cost control programmes and
projectedcashconversion.
Theprocess–whichmanagementconductedand
theCommitteereviewedtosupporttheBoard’s
statement–included:
• •
ReviewingtheGroup’ssourcesoffundingand,
inparticular,testingtheleveragecovenantin
ourfinancingarrangementsandassessing
availableheadroom
• •
Reviewingtheshort-,medium-andlong-termcash
flowforecastsinvariousseverebutplausibledownside
scenarios,aswellasreversestress-testingforecasts
• •
Assessing the Group’s current and forecast activities
and factors likely to affect its future performance and
financialposition
• •
The Committee discussed the going concern and
viability statements at the March 2025 Committee
meeting, recommending that the Board provide the
statements on 117 to 118, and 62,respectively.
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Audit Committee report continued
Significant financial judgements and estimates
In applying the Group’s accounting policies, management
mustmakejudgementsandestimatesthathavea
significanteffectontheamountsrecognisedinthe
AnnualReportandAccounts.Managementpresented
itsviewonkeyaccountingissuesandresulting
considerationstotheCommitteethroughouttheyear.
TheCommitteereviewedthemostsignificantfinancial
judgementareasandestimations,detailsofwhichare
explainedinthetablebelow.Ineachcase,theCommittee
consideredandchallengedthekeyfactsandjudgements
thatmanagementpresentedandconsultedwithPwCas
externalauditortoestablishitsprofessionalviewonthe
judgements.Thisincludedareviewofthedisclosures
includedwithintheAnnualReportandAccounts.
Issue/area of judgement Committee action and conclusion
Impairment of goodwill and intangible assets
Potential indicators of a higher risk of impairment are that
the Group’s market capitalisation is below the net asset
value of the Group.
Management presented a summary of the impairment
of goodwill and intangible assets for the cash
generating units of the Group to the Committee for
review. This included key assumptions, including
discount and growth rates, and potential sensitivities.
The Committee also received a paper from
management that considered the enterprise value of
the Group and current market capitalisation in respect
of potential indicators of impairment.
The Committee also challenged the key assumptions
made by management and concluded that there was no
impairment to any of the segments.
Special Items
The Group discloses Special Items – which are either
irregular or technical adjustments to ensure compliance
with IFRS requirements – separately to provide a clearer
indication of underlying performance.
For more detail, see note 4 to the Consolidated financial
statements on pages 142 to 143.
The Committee regularly challenges management on
what are considered Special Items. It reviews in detail
the spend that is excluded or separated from reported
Underlying profit and considers guidance from the FRC
and the external auditors.
The Committee is satisfied that it is helpful to a reader
of the financial statements to report Underlying profit,
together with IFRS profit, without Special Items – and
that all Special Items reported met with the Group’s
definition of such items.
Appointing a new external auditor
PwChasbeentheGroupauditorsince2012and
successfullyre-tenderedfortheauditin2016.Given
themandatorypartnerrotationrequirements,anew
audit partner, Craig Skelton, became responsible for
signingtheauditfromJune2024.
Our Committee ran a competitive audit tender process in
theyear,tomeetregulationsaheadof2026.Wesetout
moredetailsandtheresultsoftheprocessonpage94.
Correspondence with the FRC
InJuly2024,theFinancialReportingCouncil(FRC)
wrotetotellusithadreviewedourAnnualReportand
Accounts for the year ended 31 December 2023, in
accordancewithPart2oftheFRCCorporateReporting
ReviewOperatingProcedures.TheFRCconfirmedthat
ithadnotidentifiedanyissuesthatrequiredaresponse.
Itdiddetailasmallnumberofsuggestedclarifications
forfuturereporting,whichtheCommitteeconsidered
andmadesurewereaddressedasnecessaryinthe
2024financialstatements.
The Chair also received a letter in November 2024 from
the FRC noting that it had carried out a routine Audit
QualityReviewofPwC’sauditoftheGroupand
Company’sfinancialstatementsfortheyearended
31December2023.Thereviewfoundnokeyfindings,
indicatingcompliancewithauditingstandards.One
pointwasnotedwithinthe“OtherFindings”areaoftheir
reportinrelationtoworkperformedonthetestingof
short-termforecastsfortheASgoodwill,whichwas
addressedbyPwCintheauditfortheyearended
31December2024.
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Audit Committee report continued
Integrity of reporting and governance
WereviewedwhethertheAnnualReportandAccounts,
takenasawhole,arefair,balancedandunderstandable,
and provide the necessary information for shareholders
toassesstheGroup’sfinancialpositionandperformance,
businessmodelandstrategy.Wedetailtheworkdoneto
makethisstatementinthetablebelow.
OurCommitteealsoreviewstheinterimfinancial
reportingaspartofthereportingcycle.Thisincludes
challengetoestimates,judgementsandgoingconcern
assumptions.
WealsoreceivedandreviewedanumberofFRC
thematicreviews,andotherreportingandgovernance
updates,duringthepast18months.Theseincludedthe:
• •
FCA’snewUKListingRules,effectiveJuly2024
• •
FRC’sNovember2023reviewofCorporate
Governance Reporting
• •
FRC’s UK Corporate Governance Code update,
effectivefrom1January2025
• •
FRC’sAnnualReviewofCorporateReporting
2023/24
• •
FRC’sAuditTenders:Notesonbestpractice.
Toensureoureffectiveness,wecontinuetoreviewthe
divisionofresponsibilitiesbetweenourCommitteeand
theExecutiveRiskCommittee.
Climate-related reporting and governance
The Committee plays a key role in the governance of
climate-relatedrisksandopportunities.Wewillcontinue
to oversee ESG initiatives and related reporting
requirementstomakesuretheGroupcontinuestotake
a thoughtful and pragmatic approach to reporting,
complianceandassurance.
CSRDreportingrequirementscontinuetobeakeyfocus
areaforourCommittee.In2024,anexternalconsultant
wasappointedtosupporttheGrouptodetermine
double materiality levels, as prescribed by the directive,
whileourInternalAuditteamwasaskedtoreview
in-depth the robustness of processes and controls
aroundthedataexpectedtofeedintofuturedisclosures.
AsaCommittee,wecontinuetomonitordevelopments
and the progress of remediation plans relating to any
issuesidentified,aheadofthereportingrequiredfor
theyearendingDecember2025.
Risk management and internal
controlenvironment
Eachyear,theBoardisrequiredtoconductareview
oftheeffectivenessoftheGroup’ssystemsofrisk
managementandinternalcontrol.AtourMarch2025
meeting,ourCommitteereviewedmanagement’s
assessment of the key elements of these systems
andconfirmedtheiroveralleffectiveness.
Ourconclusiondrewon:
• •
The internal audit programme completed during 2024
and progress in implementing the actions from it
• •
Ourprogrammeofriskreviewsanddiscussionswith
senior managers and other staff across the Group
throughout the year
• •
Progress on identifying material controls and
assessing control effectiveness for future
compliancewithProvision29oftheupdatedCode,
whichwasissuedinJanuary2024
• •
Ongoingmanagementassurance–through
Committee papers, and Board and Committee
presentationsanddiscussions–toreviewthe
Group’skeyfinancialcontrolstoensurethey
supportourcontinuedgrowth
Fair, balanced and understandable
In supporting this statement, the Committee oversaw work that included:
• •
Establishing a working group of appropriately qualified
people at Group level to oversee the drafting of the Annual
Report and Accounts. This group met regularly to ensure
that disclosures were appropriate for all stakeholders and
that drafting was progressing well
• •
Engaging a corporate communications and reporting
adviser to assist in drafting, editing and proofreading the
Annual Report
• •
Discussing the equal prominence of GAAP and non-GAAP
financial measures
• •
Ensuring that the FRC’s latest guidance, along with other
relevant guidance, was considered
• •
The CEO and CFO confirming that, in their opinion, the
Annual Report was fair, balanced and understandable and
that they were not aware of any material misstatements
• •
Requesting that certain key contributors, for example
presidents and finance directors of our global divisions,
sign a declaration confirming the accuracy of their
information
• •
Arranging for our remuneration consultants to review
theDirectors’ remuneration report
• •
The Vice President, Group Finance completing an
audittrail for material data underpinning non-financial
information in the Annual Report
• •
Circulating drafts of the Annual Report to PwC,
theAuditCommittee and the Board for review.
The Committee discussed the fair, balanced and understandable statement at our March 2025 Committee meeting and,
inlight of the above, recommended that the Board provided the statement on page 119.
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Audit Committee report continued
• •
Thekeyfinancialcontrolsquestionnaire,whichis
completed and signed by each Group operating unit
eachquarter
• •
Representations to the CFO from the divisions’
financialandcommercialmanagementthatthe
financialinformationreportedtotheGrouphasbeen
prepared according to our accounting policies and
that all relevant information has been provided to
preparetheGroup’sAnnualReportandAccounts.
Theserepresentationsaremadetwiceayearinline
withourexternalreportingtimetable.
Internal audit and risk management function
With a direct reporting line to our Committee Chair, the
Group Internal Audit and Risk Director independently
assesses the effectiveness of our internal control and
risk management processes, highlights key issues,
makesrecommendations,andmonitorshowmitigations
andrecommendationsarebeingimplemented.
Synthomer’s dedicated in-house Internal Audit function
drawsonspecialistresourcesasrequired.
AteachofourCommitteemeetingsin2024,we
reviewedprogressagainsttheInternalAuditannualplan
andexploredareasneedingaction.Wealsoreviewed
completed audit reports, looking at recurring themes
thatmightneedGroupactionandatareaswherethe
reportfindingsweredifferentfromself-assessments.
Theriskmanagementprocesscontinuestoworkwell.
Last year, our Group Internal Audit and Risk Director and
herteamhelpedtheBoardtoreviewandupdateourrisk
appetite statements for our refreshed principal risks,
makingsuretheyreflectedSynthomer’scontinued
strategicfocus,andthiswillberevisitedin2025.
2024 external audit
TheCommitteereviewedandrecommendedtothe
BoardthecontinuedappointmentofPwCastheGroup’s
external auditor, approving its remuneration and terms
ofengagementfor2024.
Given his length of service, our former lead audit partner
since2019,DavidBeer,steppeddownaheadofthe
mandatorypartnerrotationdatein2025.Davidhandedover
toCraigSkelton,ournewleadauditpartnerfromPwC.
PwCpresentedthestrategyandscopeoftheauditforthe
year ended 31 December 2024 at our Committee meeting
inDecember2024.Thesekeytopicswerediscussed:
December 2024 Committee action or outcome
PwC’s audit risk assessment
(pages 121 to 127)
PwC undertook a detailed risk assessment, setting out its view of the significance of
key risks and the potential risk of material misstatement.
Materiality level for
theaudit (page 124)
PwC proposed an audit materiality level of £10.4m, based on 0.5% of revenue. This is
a change in the approach adopted in previous years, given the recent volatility of
profit levels.
After discussing this with PwC and management, theCommittee agreed it was an
appropriate methodologyfor 2024.
PwC’s audit plan We reviewed the audit coverage and agreed scope (pages 121 to 127) in detail,
agreeing they were appropriate. The Committee noted and approved the continued
high level of coverage and the timetable for the audit to be completed.
PwC’s resources With PwC, we reviewed and discussed its resources – particularly the experience of the
teams covering key overseas territories, given changes to scoping. We held a number of
meetings with the new audit lead partner during the year and discussed his experience
with clients operating in similar industries.
Audit fee and terms
ofengagement
The Committee reviewed PwC’s fee proposal in light of therisks identified and proposed
scope. We approved the proposed fee of £2.47m – this includes an inflationary increase
on 2023’s £2.45m fee, and is partially offset by scope and identified efficiencies.
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Audit Committee report continued
AtourMarch2025Committeemeeting,wediscussedthesekeytopicswithPwCinrelationtothe2024audit:
March 2025 Committee action or outcome
Confirmation of PwC’s audit plan PwC confirmed that the audit materiality had been revised to £9.9m to reflect the
actual results of 2024.
Audit findings, significant issues
and other accounting judgements
(pages 121 to 123)
These were discussed with PwC and management – the work of the Committee is
described earlier in this report.
Management representation letter The Committee reviewed and approved this.
PwC’s independence and
objectivity, and quality-control
procedures
The Committee evaluated and confirmed PwC’s independence and objectivity,
and quality-control procedures.
Duringtheyear,theCommitteeChairwasinregulardiscussionwithPwC’sleadauditpartnertodiscussthe
progressoftheaudit.TheCommitteemetPwCwithoutmanagementpresentaftertheMarch2025Committee
meeting.Nosignificantissueswereraised.
TheCommitteeevaluatedtheperformanceandeffectivenessoftheexternalauditorinthefollowingways:
Audit quality – how we reviewed PwC’s performance
External evidence The Committee reviewed the FRC’s 2023/24 Audit Quality Inspection Report, summarising
its findings from an assessment of a selection of PwC audits. The report noted PwC’s
ongoing commitment to high audit quality and well-developed audit culture, with
inspection results similar to prior years. Areas for improvement were also outlined,
withactions taken by PwC in response.
Management evidence At our request, management sought feedback from people across the business who were
involved in working on the year-end financial statements with PwC teams. The feedback
was broadly positive indicating that PwC had performed its audit well, particularly given
lower levels of materiality. It was noted that the timeliness and communication of the
audit plan and information requests had affected the efficiency of the audit.
Audit Committee
evidence
The lead audit partner attended all Committee meetings during the year. In assessing
thequality of the audit, the Committee noted the professionalism, pragmatism and
robustness of challenge to management, particularly with regard to judgemental items
and key business risks.
Auditor independence, objectivity and length
ofservice
InadditiontoourCommittee’sannualreviewofPwC’s
effectiveness,weconsidereditsindependenceand
objectivity.WeconcludedthatPwCcontinuesto
demonstrateappropriateindependenceandobjectivity.
Aspartofthisreview,PwCprovidedassurancestothe
Committee in relation to its independence, including
safeguardsimplemented,confirmationofcompliance
withethicsandindependencepoliciesandprocedures
byaudit-relatedstaff,andconfirmationofindependence
inrespectofnon-auditservicesprovided.Thisincluded
one-offworkdoneinrelationtothebondissuancein
theyear.
Given David Beer’s tenure as the Group’s lead audit
partner,hewassubjecttomandatorypartnerrotation
in2025.Inanticipationofthis,PwCrotatedthepartner
during2024,appointingCraigSkeltonasPwC’slead
auditpartnerforSynthomerforthe2024financial
yearonwards.
The Committee has a clear policy on the provision
ofnon-auditservicesbytheexternalauditorandhas
definedtheverylimitednon-auditservicesitcanprovide,
inlinewiththeFRCEthicalStandard.TheCommittee
alsoperiodicallyreviewsalogofallservicesprovidedby
majorexternalauditfirms,toensuretheCompanyhas
sufficientoptionsinthecaseofanyfutureaudittender.
Details of audit and non-audit fees paid to the auditor
in2024aresetoutinnote7onpage147.
The Committee also maintained oversight of compliance
withthepolicyonemployingformerauditors.
Synthomer plc Annual Report 202493
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Audit Committee report continued
External audit tender for 1 January 2026 onwards
The Committee undertook a competitive audit tender
processintheyear,aslegallyrequiredbefore
31December2026.‘Big4’andanumberofchallenger
firmswereinvitedtotakepartinthetenderprocess.
Anumberoffirmswereexcludedordeclinedto
participate because of independence considerations or
concernsovertheirabilitytodeliverahigh-qualityaudit
ofacompanyofoursize,complexityandglobalfootprint.
As part of the tendering process, the Committee chair
metwithrepresentativesofthefirms,includingtheir
proposed lead audit partners, to understand their
approachtoauditqualityandtheirabilitytodelivera
high-qualityaudit.TheCommitteereviewedthemost
recentaudit-qualityreviewfindingsofeachfirmand
challengedeachfirmonanyshortcomingsidentified
inthosereviews.
TheCommitteereviewedtheFRC’sguidanceonbest
practiceforaudittenders,whichinformedourapproach.
Eachfirmwasgivendetailedinformationaboutthe
business and the opportunity to meet key members of
management.Firmswerealsogivenaccesstoprevious
audit plans and audit reports from our existing auditor,
tomakesuretheirproposalswerefullyinformed.
Given the continually evolving IT landscape of both our
businessandindustryasawhole,theuseoftechnology
toprovideeffectiveinsights,improveauditquality
andprovideefficiencysavingswasoneofourkey
considerationsinselectingafirmwithanauditplanfit
forthefuture.Aspartofthis,wechallengedfirmsto
presenthowtheyintendedtousetechnologysolutions
toaddvaluetotheauditprocess.
Participatingfirmswereassessedonanumberofkey
criteria, including:
• •
Innovation and ability to add value, including the use
oftechnologyandITsolutionstoperformanauditfit
for the future
• •
Ability to provide a seamless global audit of a group
withourcomplexityandglobalnature
• •
Findingsoftheiraudit-qualityreview,aspublishedby
the FRC
• •
Qualitycontrolandcommitmenttocontinuous
improvement
• •
Independence considerations, including non-audit
services currently provided
• •
Skillsandexperienceofcoreteammembers.
Aftercarefullyconsideringtheproposals,weselected
PwCasthesuccessfulfirm.PwChasbeentheGroup
auditor since 2012 and successfully re-tendered for the
auditin2016.Givenitstenureasexternalauditorsince
2012,anewfirmwillneedtobeappointedforthe
financialyearsending31December2032onwards.
Synthomer plc Annual Report 202494
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Nomination Committee report
My tenure as Nomination Committee Chair
hasbegun during a transitional period for
Synthomer, and for the Board. The Board’s
continued evolution is deepening our sector
expertise and broadening our range of
experiences, bringing fresh perspectives
tosupport Synthomer’s transformation.
WhilemyownappointmentasSynthomerChair
wasanimportantfocusfortheCommittee–asIan
explains on page 97–therehavealsobeenanumber
of other changes in the composition of the Board
announcedsincethelastAnnualReport.
InSeptember2024,UweHalderjoinedtheBoard
asaNon-Independent,Non-ExecutiveDirector.Uwe
hasspenthisentirecareerworkingintheglobal
chemicals industry, including his current position as
chiefexecutiveofficerofKLKOLEOEurope,partof
the global oleochemical and manufacturing division
ofKualaLumpurKepongBerhad(KLK),whichis
Synthomer’slargestshareholder.
TheHon.AlexanderCattoadvisedtheBoardthat
heintendstostepdownasaNon-Independent,
Non-ExecutiveDirectorbyournextAGMinMay2025.
Alexander has been on the Board, representing
Synthomer’sfoundingfamilyandmajorshareholders,
since 1981, and more recently served as our designated
Non-ExecutiveDirectorleadingworkforceengagement.
WhileourpathsatSynthomerhaveonlycrossedbriefly,
IwouldliketothankAlexanderforhiscommitmentto
theCompanyoverthepastfourdecades.
Andofcourse,asnotedelsewhere,mypredecessor
asSynthomerChair,CarolineJohnstone,alsostood
downfromtheBoardon1January2025.Iknowthe
Board and the business hugely appreciate Caroline’s
significantcontributionstoSynthomer’sstrategy,
cultureandachievementsaswellasherdedication
throughouthertenureontheBoard.
More recently on 6 March 2025, Ian Tyler, Senior
IndependentDirectorandNon-ExecutiveDirector,was
appointedtotheboardofBPp.l.c.asanindependent
non-executive director and as Chair elect of the
RemunerationCommitteewitheffectfrom1April
2025.Havingreviewedthetimerequirementsofhis
board roles, Ian has advised the Company that he
intendstostanddownfromtheSynthomerBoardin
thesecondhalfof2025,withanactualleavingdate
tobeagreedandannouncedinduecourse.Asearch
foranewindependentnon-executivedirectorwill
commenceshortlyinordertoensuresufficient
overlapwithIaninrespectofhisroleasChairof
theSynthomerAuditCommittee.
Bringing fresh perspectives to the Board
TheongoingchangesinBoardcompositionreflect
thewiderevolutionthathasbeentakingplaceacross
Synthomerinrecentyears.Injustafewyears,
theBoardhasgonethroughaconsiderable
transformation in terms of the range of deep
experience and diversity of background in key areas
suchaschemicals,financeandgovernance.For
example,UweHalderandMartinaFlöel,whojoined
in September 2023, both bring profound expertise
andunderstandingofthechemicalssector.
“Wewillcontinuetoensurethat
the Board’s breadth and depth
of experience keeps evolving
to provide the support and
challenge our Executive
Committee needs to
successfully deliver
Synthomer’sstrategy.”
Peter Hill, CBE
Nomination Committee Chair
Synthomer plc Annual Report 202495
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Nomination Committee report continued
WeintendtocontinuetorenewandrefreshtheBoard,
taking into account our existing Board members’ skills
and expertise, and are currently conducting a rigorous,
Code-compliant search for an additional Independent
Non-Executive Director in light of Ian’s plans to stand
downtowardstheendoftheyear.
Renewalonthisscaleprovidesfreshperspectives,and
IhavenodoubtthattheongoingevolutionoftheBoard
willbringnewstrengthsandexpertise.AsaNomination
Committee,wewillcontinuetoensurethattheBoard’s
breadth and depth of experience keeps evolving to
provide the support and challenge our Executive
Committee needs to successfully deliver Synthomer’s
strategyinarapidlychangingworld.
Culture and diversity
Alongsidesubjectexpertiseandappropriateskills,
supportingdiversityinallitsforms–underpinnedbyan
inclusiveculture–isoneofthebestwaystoencourage
innovationandexcellenceinanybusiness.So,Iam
pleased to see that diversity and inclusion is one of
Synthomer’sfivestrategicpillars.
AtaBoardlevel,itmeanswefullyendorsetheFinancial
ConductAuthority’supdatedListingRulerequirements
and the recommendations of the FTSE Women Leaders
Reviewtomaintainatleast40%femalerepresentation
ontheBoardandforatleastoneoffourkeyroles–
Chair,CEO,SeniorIndependentDirectororCFO–tobe
heldbyawoman.FollowingCaroline’sdepartureatthe
endof2024,wedonotcurrentlymeettheListingRule’s
40%target.WhileourtoppriorityinanyBoard-level
appointmentisfindingthebestoverallcandidateforthe
rolewithregardtoabroadrangeoffactors,enhancing
thediversityofviewpointsatBoardlevelremainsa
significantconsiderationfortheCommittee.
Atmanagementlevel,attheendof2024,women
represented28%ofourExecutiveCommitteeand29%
ofourseniormanagement,upfrom15%in2020.Wewill
continue to monitor progress against our Vision 2030
seniormanagementgenderdiversitytarget.
Genderdiversityaside,wecontinuetocomplywiththe
guidance that at least one Board member be from an
ethnicallydiversebackground.IconsidertheBoard’srich
internationalperspective–withsevennationalitiesfrom
threecontinents–tobeoneofitsgreateststrengths.
In 2024, to demonstrate the Board’s ongoing
commitmenttodiversity,weadoptedaDiversity,Equity
and Inclusion Policy, applicable to the Board and its
Committees.ThispolicyalignsfullywithourBoard
practiceandapproach.Itacknowledgestheimportance
of diversity in the boardroom as a key driver of board
effectiveness–andthatdiversityinallitsforms
producesbetterdecisionmakingandoutcomes.
Continuing to review the Board’s skills
Everyyearweconductaself-assessmentskillsreview
againstindustrybenchmarks.Thisreviewinforms
discussions at both Committee and Board level on
successionplanningandBoardskills.
HavingdiscussedthefindingsoftheBoardskills
reviewcompletedinDecember2024,theCommittee
concluded that the Board has a good breadth of skills
and experiences, and in particular a high degree of
chemicalindustryexpertise,whichwasbolsteredby
Uwe’sappointmenttotheBoardinSeptember2024.The
Committeewillconsidertheneedforspecificskillsinthe
future, such as in digitalisation and AI, but also recognises
that Board members continue to develop these skills
throughotherboardappointmentsandtraining.
Reviewing the Board’s performance
We also carried out an internal Board effectiveness
reviewthisyear,withtheuseofaquestionnairecovering
the Board, its Committees, the Chair and individual
directorcontributions.
Overall,theresultsofthereviewwereverypositive,
suggestingthattheBoardisoperatingwell.Thereis
ahighleveloftrustbetweenBoardmembers,with
dissentingviewsexpressedandopendiscussions
facilitatedbytheChair.Therelationshipbetweenthe
Board and the Executive Committee remains very
openandstrong.
Looking ahead
Ibelievethatinafast-changingworldtherightbalance
ofskills,expertiseandviewpointsonanyBoardneeds
tocontinuallyevolvetostayrelevant,especiallyas
companies’ agendas in areas such as sustainability, the
applicationofartificialintelligenceandtheramifications
ofgeopoliticscontinuetodevelop.TheNomination
Committee’s ambition is to ensure that our Board
remainswellplacedtosupporttheExecutiveCommittee
indeliveringSynthomer’sstrategyintheyearsahead.
Peter Hill, CBE
Nomination Committee Chair
11 March 2025
Synthomer plc Annual Report 202496
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Nomination Committee report continued
Appointing a new Chair
Caroline Johnstone formally stepped down as a
Non-Executive Director and Chair of Synthomer’s
Board, with Peter Hill, CBE succeeding her, on
1 January2025.
As outlined in our 2023 Annual Report (page 97),
asub-committee of the Nomination Committee,
madeup of Independent Non-Executive Directors and
chaired by me, carried out a rigorous, Code-compliant
and independent search for Caroline’s successor.
Thiswork was supported by external advisers Egon
Zehnder – which has no connection with the Company
or any individual Director – which provided a longlist of
candidates and helped us narrow that down to a shortlist
of potential candidates with particularly strong industrial
experience of relevance to Synthomer.
I met all shortlisted candidates and recommended
asubset to meet Holly Van Deursen and Michael
Willome. They recommended a final set of appointable
candidates who then met every other member of the
Board as well as our General Counsel and Company
Secretary. Following those meetings, the Board agreed
unanimously to appoint Peter.
Peter brings strong public company governance and
international manufacturing experience in a range
ofindustries, in both executive and non-executive
capacities. And, as chief executive officer of Laird plc
between 2002 and 2011 and non-executive chair of
Keller Group since 2016, he is also no stranger to
corporate transformation. He is currently non-executive
chair of The Nuclear Decommissioning Authority, a UK
Government arm’s-length body sponsored by the
Department for Energy Security and Net Zero, so also
has a unique perspective on the energy transition.
Ian Tyler
Senior Independent Director
Board and Executive Committee diversity
ThefollowingtablesprovidedataongenderidentityandethnicbackgroundacrossourBoardandExecutive
Committeeasatthedateofthisreport.Theinformationwascollectedonaself-reportingbasis.
Number
ofBoard
members
Percentage
of the
Board
Number of senior
positions on the Board
(Chair, CEO, SID, CFO)
Number
in Executive
Committee
Percentage
of Executive
Committee
Men 7 70% 3 5 71%
Women 3 30% 1 2 29%
Not specified/prefer notto say – – – – –
White British or other White
(includingminority-white groups)
8 80% 3 5 71%
Mixed/multiple ethnicgroups – – – – –
Asian/Asian British 2 20% 1 2 29%
Black/African/Caribbean/Black British – – – – –
Other ethnic group, including Arab – – – – –
Not specified/prefer notto say – – – – –
Board nationality and tenure
Nationality Tenure
British 3 0-5 years 7
Swiss 1 5-10 years 1
Malaysian 1 >10 years 2
American 1
German 2
German/Italian
*
1
British/Australian
**
1
* RobertoGualdoniholdsdualGermanandItaliancitizenship.
** LilyLiuholdsdualBritishandAustraliancitizenship.
Synthomer plc Annual Report 202497
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Directors’ remuneration report: introduction from the Chair
The Committee has been particularly mindful
ofstriking a fair balance between different
stakeholder groups, following the disappointing
level of support received for the 2023 Annual
report on remuneration.
We have focused on ensuring our Executive Directors
are incentivised to deliver the key drivers of our business
strategy,whilecreatingalignmentwithstakeholders.
Thisisafinebalance,asweseektomotivateand
rewardourexecutivesappropriatelyandmeetthe
expectationsofourstakeholders,amidongoingweak
demandacrossanumberofourmarkets.
Responding to feedback from our stakeholders
TheCommitteeisveryawarethattakingafair
approachtoexecutiveremunerationisparamount.
Whileweweredisappointedbythelevelofsupportfor
the Directors’ remuneration report at our AGM in May
2024, it prompted a series of important and productive
discussionswithanumberofourkeyshareholders.
Ipersonallymetwithrepresentativesofseveralmajor
shareholders, and I understand the sense of frustration
feltattheshareholderexperiencein2023.Iwas,
however,alsoreassuredtohearrobustshareholder
support for both our executive team and our overall
strategy,includingitsimplementation.
TheCommitteehasreflectedonfeedbackreceived
throughshareholderengagement.Wecarefully
considered this valuable shareholder feedback, along
withotherimportantfactors,whendeterminingboththe
2024 remuneration outcomes and the 2025 performance
metrics.Ouraimistoensurethesemetricsprovidea
balance of challenge and motivation for our executives
whiledeliveringoutcomesthatalignwiththeinterestsof
ourstakeholders.Maintainingthisbalancewillcontinue
tobeanimportantareaoffocusfortheCommittee.
2024 performance
ThishasbeenaproductiveyearforSynthomer,with
good progress in underlying earnings and strategic
advancestoensurewearefocusingonourmost
differentiated, speciality products for attractive
endmarkets.
Our2024revenueandEBITDAwereinlinewith
expectations.Theyreflectvolumegrowthanda
strong gross margin performance underpinned by
important progress on our multi-year cost-saving
andreliabilityimprovementprogrammes–andby
ongoing strategic reallocation of our capital and
otherresourcestowardsthehigher-margin,more
resilientspecialitysolutionswithinourportfolio.
Overallperformancewas,however,affectedby
weakcyclicialdemandacrossendmarketsserved
bythechemicalssector.
2024 incentive outcomes
ThatSynthomermadesignificantprogressin
2024–anddeliveredinlinewithexpectationswithout
anymeaningfulrecoveryinourendmarkets–is
testament to the continued focus of our executives
ondrivinganddeliveringSynthomer’sstrategy.In
particular,whileend-marketdemandremainssoft,
the management team still delivered revenue and
EBITDAinlinewithexpectationsandcontinuedto
develophigher-marginspecialitysolutions.Good
progresswasalsomadeonimprovingreliabilityand
deliveringadditionalcostsavings,allofwhichserve
topositionSynthomerwellforthefuture.
Assuch,alongsideconsideringshareholderviews
andfeedback,theCommitteereflectedonthe
difficultyofthechallengethatmanagementfaced
in2024whendeterminingtheappropriatelevelof
rewardforourExecutiveDirectorsfortheyear.
“ Taking a balanced approach
tothewaywerewardour
executives is paramount and
maintaining an appropriate
balancebetweenmotivating
executivesandaligningwith
stakeholderoutcomeswill
continue to be an important
area of focus for the
Committeeduring2025.”
Holly Van Deursen
Remuneration Committee Chair
Synthomer plc Annual Report 202498
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Directors’ remuneration report continued
Annual bonus
Asindicatedinthe2023AnnualReport,akeyobjective
for2024wastooperateasimplifiedannualbonus,
focusing on key priorities to ensure the scheme struck
abalance,motivatingmanagementtodeliverstrong
performance and enabling the delivery of an affordable
payout–takingintoaccountallstakeholderinterests.
EBITDAwaschosenasthesinglefinancialmetricfor
2024, measuring our performance through core
operations,whichisakeyindicatorofourbusiness
recovery,andwithan80%weightinginthebonusplan.
Theremainderofthebonuswasbasedonpersonal
objectiveslinkedtoongoingbusinesstransformation
and on SHE measures aligned to our ongoing
commitmenttosafety.
TheEBITDAout-turnof£149.2mrepresentsstrong
year-on-yeargrowthinadifficultmarket.TheCommittee
recognised that the management team has maintained
focus on the key aspects of delivering the business
strategy–inparticular,thefocusonhigher-margin
specialityproducts–improvingreliabilityanddelivering
costsavings.Thiswasreflectedinthe10%awardedto
bothExecutiveDirectorsfortheirpersonalperformance.
The continued focus on health and safety also delivered
anout-turnof10%oftheoverallbonus–themaximum
forthiselement.
The Committee and management team held detailed
discussionsontheappropriatelevelofbonusaward
fortheExecutiveDirectors,takingintoaccountthe
achievements of the management team in the
contextofachallengingenvironment,theaffordability
considerationsnotedabove,stakeholderviewsand
feedback,andthebroadershareholderexperience.
Asaresult,andtakenintheround,discretionwasapplied
toreducetheformulaicout-turnof100%ofmaximum
to52%.ThemanagementteamandtheCommitteeboth
consideredthistobeafairresultfortheyear,which
effectivelybalancesallstakeholderinterests.
Performance Share Plan (PSP)
The earnings per share (EPS) and total shareholder return
(TSR) metrics for the 2022 PSP, based on the three-year
performance to 31 December 2024, did not achieve the
thresholdlevelsetwhentheawardsweremade.
Thenewandprotectedproducts(NPP)ratioandcarbon
reduction metrics exceeded the maximum levels set by
the2022PSP.
The synergies achieved from the 2022 adhesives resins
acquisitionalsodeliveredabovethemaximumlevels
setbythePSP,reflectingtheprogressthathasbeen
madeinintegratingthebusinessintothewider
Synthomergroup.
The Committee considered that the overall out-turn
of40%wasfairanddidnotapplyanydiscretion.
Thesharepricehasreducedsincetheawardswere
originallymadeand,assuch,therewerenowindfall
gainstobeconsidered.
Performance measures for 2025 incentives
Our short-term and long-term incentive opportunities
remainatthesamelevelsas2024.
Annual bonus
Theannualbonusplanreflectsthekeyfinancial
andnon-financialmetricsthatsupportdeliveryof
ourstrategyin2025.TheCommitteehascarefully
considered the most appropriate metrics for 2025,
taking into account shareholder feedback and the
businessimperativesfortheyear.Wewillcontinue
touseEBITDAasourmainfinancialmetric,with
aweightingof60%,becausewebelievethatthis
continuestostronglyalignwithouroperational
performance.However,in2025,wewillreintroduce
operatingcashasasecondfinancialmetricat
20%weighting,reflectingfeedbackfromour
stakeholders and our increased focus on
improvingcashgenerationin2025.
The2025measureswillcontinuetoincludeasmall
weightingfornon-financialmetrics,with10%for
achievingSHEobjectivesandupto10%forachieving
strategicpersonalobjectives,alignedtothedeliveryof
ourstrategy.
PSP
Forthe2025PSPawards,inresponsetoshareholder
feedback and our commitment to reintroduce EPS into
thePSPwhereappropriate,the2025PSPawardswill
nowincludeEPSwitha30%weighting,replacingEBITDA
growth.TheCommitteealsoconsideredwhether
leverageshouldbereplacedwithareturnoncapital
measure.Onbalance,wedecidedthat,giventheongoing
focus on cash generation and debt reduction, leverage
shouldremainfor2025awardswitha30%weighting.The
Committeebelievesthatareturn-on-capitalmetricwillbe
akeyindicatorinthefutureandwillcontinuetoconsider
introducingitintothePSPinfutureyears.RelativeTSR
willcontinuetohavea20%weighting,toalignwiththe
shareholderexperience.Thecomparatorgroupis
unchanged(FTSE250excludinginvestmenttrusts).
TheCommitteebelievesthatthesefinancialmetrics
willincentivisemanagementtoreducedebttolong-term
sustainablelevelsandmanagefinancingcosts–and
improveearningspershareoverthelongerterm.
Theremaining20%oftheawardwillcontinuetobe
basedonstrategicgoals.ForESG,afterdetailed
discussions of the issue (see page 100),thefocuswill
continue on Scope 1 and 2 absolute carbon reduction
measures.NPPwillbereplacedbyameasurement
alignedtoNewProductVitality(NPV),basedonGroup
grossmargincontribution.Webelievethatthisbetter
reflectstheimportanceofinnovationwithinour
business strategy because it focuses on value
deliveredonproductslaunchedinthepastfiveyears.
Synthomer plc Annual Report 202499
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Directors’ remuneration report continued
As approved by our shareholders at the 2023 AGM, the
additionalPSPawardof50%ofbasesalarywillcontinue
tobebasedwhollyonmorechallengingrelativeTSR
targets.ThisawardwillalsousetheFTSE250excluding
investmenttrustsasacomparatorgroupandwillonly
starttovestforachievingupper-quartileperformance,
withmaximumvestingachievedatupperdecile,toalign
theExecutiveDirectorsrewardwithourshareholders’
experience.
TheCommitteeacknowledgesthepotentialforwindfall
gainsgiventhecurrentsharepricelevel;however,
wealsorecognisetheimportanceofretainingand
motivating our management team to deliver our strategy
and compensating them appropriately relative to our
FTSEchemicalpeers.Againstthisbackdrop,the
Committeecarefullyconsideredtheawardlevelsfor
2025PSPawards.Wefeelstronglythatgrowingthe
sharepricefromthislevelwillrequiremanagement
tosuccessfullydriveimprovementsinoperational
performance, to effectively manage the balance sheet
andtocontinuetotransformtheorganisation.Any
material share price improvements from this point
willrequiresignificantperformanceandeffortfrom
management,whichshouldberewarded.
Thereforewehavedecidedtomaintaintheprimary
incentiveawardfortheCEOat200%ofbasesalaryand
theCFOat150%,withtheopportunitytoreceivean
additional50%ofbasesalaryundertheadditionalPSP
award.TheCommitteeretainsdiscretiontoreviewthe
levelofpayoutawardattheendofthevestingperiod,
andtoscalebackvestingif,atthattime,weconsider
thattheoutcomedoesnotalignwithshareholderand
widerstakeholderexperienceduringtheperiod.This
includesifweconsiderinretrospectthatmanagement
benefitedfromawindfall.
Wider workforce reward
TheCommitteecontinuestoreviewthereward
landscapeforthewiderworkforcewhenmaking
decisionsonexecutiveremuneration.Inparticular,we
haveconsideredthepercentagepayincreasesawarded
tolevelsbelowtheExecutiveCommitteeindetermining
increasesforseniormanagement.Wealsoreview
alignment of incentive metrics across the organisation
toensurethattheyreflectourbusinessprioritiesand
providelineofsighttoourkeyfinancialmetricsfor
allemployees.
Asaresult,wehavechosentoadjustourExecutive
Directors’basesalariesby3%relativeto2024levels.
Theseincreasesareinlinewiththeaverageincrease
fortheUKmanagementpopulation.
A maturing approach to sustainability
andremuneration
Forthepastfouryearswehavelinkedaproportion
ofourExecutiveDirectors’PSPstrategictargetsto
Synthomer’s Scope 1 and 2 carbon reduction targets,
reflectingthegrowingimportanceofsustainabilityfor
theCompany.
Wewanttoensurethatthesustainabilitymeasurekeeps
pacewithourstrategicobjectives,aswellassociety’s
growingexpectations.Assuch,thisyear,theCommittee
participatedinadeep-divesessionwithSynthomer’sVP
of ESG to learn more about the progress the Group is
making in this important area, and to discuss options for
ensuringthatourincentivemetricsremainalignedwith
ourmostrelevantsustainabilitymetrics.Ipersonally
found this session incredibly helpful in understanding
howoursustainabilityjourneyisdevelopinginsupport
ofourbusinessstrategy,andwhatwestillneedtodoto
embedScope3inourincentivemetrics.
TheCommitteeisconfidentthatourScope1and2
carbon reduction metrics continue to provide the best
approach for incentivising our executives at the present
time.Infuture,however,wemayconsideraddingScope
3 emissions to the measure as this metric becomes
moreembeddedacrossourorganisation.
Board changes
PeterHilljoinedtheBoardinSeptember2024and
suceededCarolineJohnstoneasChairon1January
2025,withafeeinlinewiththeoutgoingChair.
Looking ahead
TheCommitteehasworkedverywelltogetherthisyear,
withrobustdebateonimportanttopics.Those
discussionswillcontinuein2025,particularlyaswe
beginworktorefreshourremunerationpolicy–which
shareholderswillbeabletovoteonatourAGMin2026.
Aswecarryoutthatwork,ourfocuswillbeonensuring
thatthepolicyremainsalignedwithourbusiness
strategy and continues to provide an appropriate level of
rewardandincentiveforourexecutives.Ilookforward
todiscussingthePolicyandanychangeswithkey
stakeholdersinthecomingmonths.
Holly Van Deursen
Remuneration Committee Chair
11 March 2025
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Remuneration at a glance
Here we highlight the performance and
remuneration outcomes for the year ended
31 December 2024. More detail is provided
intheannual report on remuneration from
pages103 to 116.
Policy for Executive Directors
The table on this page summarises the policy approved
by our shareholders at the Annual General Meeting on
16May2023.Findmoreinformationabouthowwe
implemented the policy in 2024 on pages 103 to 110.
Thefullpolicycanbefoundonourwebsite.
The Remuneration Committee continues to align
withtheprinciplesofDirectors’remunerationoutlined
intheUKCorporateGovernanceCode,andassetout
inthepolicy.
TheCommitteetakesaccountofthereward,incentives,
and terms and conditions of employees throughout the
GroupwhenconsideringtheremunerationofExecutive
Directorsandseniormanagement.
Base salary
Generally reviewed each year. Salary increases of 3% were awarded with effect from 1 January 2025, in line with the
average increase for the UK management population. Executive Director salaries are:
CEO £722,741 CFO £489,240
Benefits
Include private health insurance, life insurance, car allowance and costs related to business moves (relocation) or
international assignments. The CEO also receives a housing allowance for a four-year period.
Pension
Cash allowance of 7% of base salary for the CEO and CFO, which is aligned with that of the UK workforce.
Annual bonus (audited)
Maximum up to 150% of base salary. At least 70% assessed against financial metrics (80% in 2024), with up to 30%
assessed against strategic and operational measures (20% in 2024). Awards in relation to financial performance of:
20%
of maximum for threshold
50%
of maximum for target performance
100%
of maximum for out-performance.
The Committee determines performance against strategic individual objectives in the round, taking into account
performance against objectives set and each executive’s overall contribution. A proportion of the bonus earned is
deferred into shares for two years. For current Executive Directors, this is one third of any bonus.
Performance Share Plan (PSP)
Shares awarded may not exceed 250% of salary (primary award 200%, additional award 50%).
Vesting based on performance over three years. For the primary award, at least 70% based on financial measures
and up to 30% on strategic and sustainability performance measures linked to delivering the business strategy.
Usually, no single measure will constitute more than 50% of an annual award. There is a two-year post-vesting
holding period requirement. For the additional PSP award, relative TSR will be the single performance metric,
withthreshold vesting for upper-quartile performance and maximum vesting at upper-decile performance.
Maximum of 25% for each element will vest for threshold performance.
Shareholding requirements
CEO 220% and CFO 200% of base salary.
Requirements expected to be built up over five years.
Remuneration type
Basesalary
Benefits
P e n s i o n
Annualbonus
PerformanceSharePlan(PSP)
Shareholdingrequirements
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Remuneration at a glance continued
2024 performance
Annual bonus
Actual performance against the three annual bonus metrics are set out below.
Weighting Threshold Target Maximum Actual Bonus
EBITDA
80%
Threshold £116.5m¹
Target £126.5m¹
Maximum £146.5m¹
£149.2m 80%
1
SHE – OSHA incidents 5% 0.22 0.14 5%
SHE – Process safety 5% 0.22 0.21 5%
Individual strategic
andoperational goals
10% 10% 10%
Total bonus as a %
ofmaximum before
discretion applied
100% 100%
2
Total adjusted bonus as
a % of maximum after
discretion applied
52%
PSP 2022 award
Actual performance against the five elements of the PSP are set out below.
Weighting Threshold Maximum Actual PSP
Relative TSR
30%
Median quartile
Upper quartile
Below
median
0%
EPS growth
(targets restated post share
consolidationandrightsissue)
30%
123.4p
143.9p
-2.5p 0%
Adhesive resins
acquisition synergies
20%
$20m
$23.2m
$37.6m 20%
NPP 10% 15% of 2024 sales volume tocome
from new products launched in the
five years to Dec 2024
20% 24.1% 10%
Carbon reduction 10% 30% reduction in CO
2
emissions
compared with2019 baseline
40% 44.9% 10%
Total outcome 100% 40%
Our key principles for Executive
Directors’remuneration
At Synthomer, our key principles for Executive Directors’
remuneration are that it:
• •
Shouldbeclearandsimplewithmaximumaward
levelsbeingclearlydefined
• •
IssufficienttoattractandretainExecutiveDirectors
of the ability and expertise necessary to achieve the
strategic goals of the Company
• •
IncentivisesExecutiveDirectorsbyrewarding
performanceanddrivingtherightbehaviourswhile
ensuring appropriate safeguards are in place to
mitigate risk
• •
AlignsExecutiveDirectorrewardwiththeexperience
ofshareholders.
Aswellasconsideringthereward,incentivesand
conditionsofemployeesthroughouttheGroupwhen
looking at the remuneration of Executive Directors and
senior management, the Committee also considers
corporategovernancerequirementsandbestpracticein
terms of remuneration structures and the process of
settingexecutiveremuneration.
TheCommitteereviewsperformancetargetsregularly
to make sure they do not encourage or motivate
inappropriaterisk-taking.Whenassessingperformance,
theCommitteewillalso,whennecessary,considerany
ESGeventsandtheAuditCommittee’sreviewsofthe
effectivenessofinternalcontrolsandriskmanagement.
1 Toaccountforthedivestmentoflatexcompoundingoperationsfinalised
inApril2024,theEBITDAtargetswereproportionallyadjustedtoexclude
contributionsfromthissegment.TheCommitteeissatisfiedthatthe
revised targets remain appropriate and maintain the same level of stretch
asthosepreviouslyset.
2 Discretionwasappliedtoreducetheformulaicout-turnto52%(seepage104).
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Annual report on remuneration
Single figure of remuneration for
Executive Directors (audited)
Year
Base salary
£
Benefits
£
Other
£
Pension
£
Total fixed
remuneration
£
Annual bonus
£
Long-term
incentives
1
£
Total variable
remuneration
£
Total
£
Executive
Directors
M Willome 2024 701,690 201,729 – 49,118 952,537 547,318 51,607 598,925 1,551,462
2023 674,700 201,368 – 47, 229 923,297 404,820 10,295
2
415,115 1,338,412
L Liu 2024 474,990 16,342 205,672
3
33,249 730,253 370,492 35,311 405,803 1,136,056
2023 456,720 15,844 50,605 31,970 555,139 274,032 – 274,032 829,171
1 For2024,thevaluesrelatetoawardsgrantedunderthePSPin2022,whichveston10March2025forMWillomeand9August2025forLLiu.Moreinformationaboutthelevelof
vestingisprovidedinthisreport.Giventheseawardshavenotyetvested,theyhavebeenvaluedbasedontheaveragesharepricefortheperiod1October2024to31December
2024of179.05p,alongwithanyaccrueddividendsfromthedateofgrant.Thenumberofsharessubjecttotheawardwasadjustedtoreflecttheshareconsolidationandrights
issue.Thiswillberestatednextyeartoreflecttheactualvalueatthedateofvesting.Therewasnosharepriceappreciationthataffectedthevalueoftheawards,sotheCommittee
didnotexercisediscretioninrespectofthesharepricechanges.
2 The2021PSPawardvaluehasbeenrestatedtoreflecttheactualvalueonvestingon8November2024.
3 LLiujoinedasCFOon1July2022.Aspartofthetermsofherrecruitment,itwasagreedshewouldbecompensatedinthefutureforanLTIPawardanddeferredsharesthatlapsed
whensheleftherformeremployer,Essentra.ThefinalpaymentwasmadeinApril2024of£205,672,inrespectoftheEssentra2021LTIP.Thepaymentwascalculatedbasedon
theactualout-turnandsharepriceatthevestingdateoftheoriginalEssentraLTIP.
Additional information for single
figure remuneration (audited) Benefits
Relocation
expenses
£
Car expenses/
benefit
£
Other
£
Total
£
M Willome 176,604
4
24,000 1,125 201,729
L Liu – 15,000 1,342 16,342
4 GivenMWillomemovedfromSwitzerlandtotheUK,hereceivesamonthlyrelocationallowanceof£7,800forafour-yearperiod.Theallowanceisgrossedupfortax.
Pension entitlements (audited)
BothcurrentExecutiveDirectorsreceiveacashallowanceinlieuofpensioncontributionsof7%ofbasesalaryinlinewiththe
pensionprovisionforthewiderworkforce.
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Annual report on remuneration continued
ThemaximumbonuslevelforMWillomeandLLiuwas150%ofsalary.
Executive Directors
Maximum bonus
as a % of salary
Total bonus
as a % of maximum
Total bonus
£
M Willome 150% 52% 547,318
L Liu 150% 52% 370,492
ForMWillomeandLLiu,onethirdofthebonushasbeendeferredintosharesfortwoyears.
TheCommitteeandmanagementteamhelddetaileddiscussionsontheappropriatelevelofbonusawardfortheExecutiveDirectors,
taking into account the achievements of the management team in the context of a challenging environment, the affordability
considerationsnotedabove,aswellasstakeholderviewsandfeedbackandthebroadershareholderexperience.Asaresult,and
takenintheround,discretionwasappliedtoreducetheformulaicout-turnof100%ofmaximumto52%.Themanagementteamand
theCommitteebothconsideredthistobeafairresultfortheyear,whicheffectivelybalancesallstakeholderinterests.
Moreinformationabouttheindividualelementsofthe2024bonusareasfollows:
1. EBITDA (80%)
Threshold Target Maximum Achieved
Level of award (% of element) 20% 50% 100% 100%
2
EBITDA
1
£116.5m¹ £126.5m¹ £146.5m¹ £149.2m
1 ToaccountforthedivestmentoflatexcompoundingoperationsfinalisedinApril2024,theEBITDAtargetswereproportionallyadjustedtoexcludecontributionsfromthissegment.
Thecommitteeissatisfiedthattherevisedtargetsremainappropriateandmaintainthesamelevelofstretchasthosepreviouslyset.
2 TheCompanydeliveredEBITDAof£149.2m,representingayear-on-yearincreasedespitechallengingmarketconditions.Thisachievementwasdrivenbyastrategicfocuson
higher-marginspecialityproducts,improvedoperationalreliability,andsuccessfulcostsavingsinitiatives.Reflectingthisstrongperformance,ExecutiveDirectorsreceiveda10%
bonusbasedontheirpersonalcontributionswhiletheCompany’songoingcommitmenttohealthandsafetyresultedinthemaximum10%bonusallocationforthiselement.
AssetoutintheChair’sletter,theCommitteeandmanagementteamhelddetaileddiscussionsontheappropriatelevelofbonusawardfortheExecutiveDirectors,considering
theachievementsofthemanagementteaminthecontextofachallengingenvironment,affordabilityconsiderations,aswellasstakeholderviews/feedbackandthebroader
shareholderexperience.Asaresult,discretionwasappliedtoreducetheformulaicout-turnof100%ofmaximumto52%.
2. SHE (10%)
Targetswithanaggregateweightingof10%relatedtoimprovementsinrecordableinjuryandprocesssafety.
Recordable injury
(recordable injury case rate)
Process safety
(measured as process safety event rate)
Target 0.22 0.22
Level of award 0% for a rate greater than 0.22 0% for a rate greater than 0.22
5% for a rate less than 0.22 5% for a rate less than 0.22
Rate achieved 0.14 0.21
Award outcome 5% 5%
Annual bonus (audited)
2024 award
For 2024, the Company operated a
bonus plan for the Executive Directors
related to the achievement of EBITDA
targets, SHE targets, and individual
strategic and operational goals,
weightedasfollows:
• •
EBITDA–80%
• •
SHE–10%
• •
Individualgoals–10%.
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Annual report on remuneration continued
3. Individual strategic and operational goals (10%)
TheCommitteeconsideredindividualgoalsandachievementsagainstthemwithanaggregateweightingof10%,including:
Chief Executive Officer Chief Financial Officer
Target 1 Progress in portfolio management according to strategy
2 Secure operational and financial progress according to plan,
in difficult conditions, and deliver full value creation in a
market recovery
3 Deliver targeted retention and staff motivation for the
wholeorganisation
1 Support strategy delivery through portfolio optimisation,
support and align to all strategic pillars, deliver corporate
finance initiatives namely net working capital, cost, tax,
interest, pensions
2 Deliver sufficient financial resources for the business,
refinance the Eurobond, operate within debt covenant
3 Improve internal process efficiency and control
environment: management reporting, service centre
performance, IT, forecast accuracy
Level of award Up to 10% Up to 10%
Chief Executive Officer Chief Financial Officer
Performance againsttargets 1 Progress in portfolio management according to strategy
Maintained strong focus on delivering the strategy in a
challenging economic environment, and ensuring
thebusiness is well positioned for a market recovery.
Forexample:
• •
Led disposal processes for non-core businesses
• •
Continued review of portfolio, including assessment
ofSpeciality Vinyl Polymers, concluding that this should
bea core business
• •
Led review of potential stranded costs in the event of
completion of non-core disposals
• •
Took a proactive approach to other potential portfolio
options, e.g. capital-light partnerships
• •
Led horizon scanning with senior geopolitics and industry
leaders, providing input to the Board strategic reviews.
1 Support strategy delivery through portfolio optimisation,
support and align to all strategic pillars, deliver corporate
finance initiatives namely net working capital, cost, tax,
interest, pensions
Achieved successful sale of the Compounds business,
withcontinued work to close out other non-core divestment
processes underway.
Put in place robust procedures to drive more focused
capitalallocation, with greater challenge of operating
andcapital costs, and their allocation, across the Group.
Successfully concluded a number of tax audits, achieving
favourable outcomes for Synthomer.
Increased factoring capacity with chosen banking partners
todeliver greater funding flexibility. Delivered interest costs
in line with budget, including through management of
hedging strategy.
Improved funding positions for both UK and US Defined
Benefit pension schemes, and commenced review of
potential buy-in/buy-out options for both schemes.
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Annual report on remuneration continued
Chief Executive Officer Chief Financial Officer
Performance againsttargets continued 2 Secure operational and financial progress according to plan,
in difficult conditions, and deliver full value creation in a
market recovery
Demonstrated strong personal leadership and support for
both operational and commercial excellence across the
business. Led a focus on “self-help” across the business, to
drive financial progress even without a market recovery.
Oversaw the ongoing review of funding options and
thebondrefinancing.
3 Deliver targeted retention and staff motivation for
thewholeorganisation
Focused on building and strengthening a culture ofinnovation
and challenge. For example:
• •
Led and strengthened the Global Leadership Team, setting
clear targets andobjectives linked to the strategy.
• •
Strengthened links to customers and suppliers.
• •
Delivered increased participation and an improved
employee engagement result, based on the 2024
YourVoiceemployee survey, despite the challenging
business environment.
2 Deliver sufficient financial resources for the business,
refinance the Eurobond, operate within debt covenant
Secured new RCF deal in early 2024 and extended the period
of temporary covenant relaxation to ensure appropriate
headroom was maintained.
Led successful issuance of €350m bond due 2029 and a
tender for €370m of bond due 2025, reducing gross debt and
extending maturity profile.
3 Improve internal process efficiency and control
environment: management reporting, service centre
performance, IT, forecast accuracy
Digitised a number of finance processes to minimise manual
intervention and improve efficiency.
Successfully transitioned key finance process teams from
the USA to the UK finance shared service centre to deliver
cost and efficiency savings.
Commenced demand forecasting improvement pilot project,
with plans to roll out across the Group.
Award outcome 10% 10%
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Annual report on remuneration continued
Weighting Threshold Maximum Outcome achieved % vesting (of maximum)
Relative TSR 30% Median Upper quartile Below median 0%
EPS
1
30% 123.4p 143.9p -2.5p 0%
Adhesive resins acquisition
synergies
20% $20m $23.2m $37.6m 20%
Carbon reduction – in Scope 1
and 2 CO
2
emissions from the
2019 baseline
10% 30% 40% 44.9% 10%
NPP – by volume over the
five-year period to end 2024
10% 15% 20% 24.1% 10%
Total 100% 40%
1 EPStargetshavebeenrestatedtoreflecttheimpactoftheshareconsolidationandrightsissueontheissuedsharecapital.Theoriginaltargetswere:Threshold46.7p,
Maximum54.4p.
25%vestsforthresholdperformance.Allmetricsvestonastraight-linebasisbetweenthresholdandmaximum.
10%oftheawardwassubjecttoastrategicmeasurerelatingtoareductionincarbondioxideequivalentemissionsoverthe
performanceperiod,excludingadditionalemissionsfromtheacquiredOMNOVAbusiness.
Carbon dioxide equivalent reduction Percentage of this part of an award that vests Percentage achieved
Less than 30% 0%
44.9% achieved, which exceeded
maximum performance, resulting
in vesting of 10% of award
Between 30% and 40% On a straight-line basis between 25% and 100%
40% or more 100%
Inaggregate,40%ofthe2022awardvested.TheCommitteefeltthefinaloutcometobefairandsonodiscretionwasapplied.
Additionally,becausethesharepriceiscurrentlylowerthanthatofthe2022grant,theCommitteeconsideredthattherewasno
windfallgain.
The2022awardwillvestforMWillomeinMarch2025andinAugust2025forLLiuasfollows:
No. of shares
1
in original award
No. of shares
that lapse
No. of shares
that vest
Estimated value of
shares that vest
2
£
M Willome March 2022 72,056 43,234 28,822 51,607
L Liu August 2022 49,303 29,582 19,721 35,311
1 Thenumbersofshareshavebeenadjustedtoreflecttheimpactoftheshareconsolidationandrightsissueontheissuedsharecapitalandaccrueddividendsfromthedateofgrant.
2 Giventheseawardshavenotyetvested,theyhavebeenvaluedbasedontheaveragesharepricefortheperiod1October2024to31December2024of179.05p.Thiswillberestated
nextyeartoreflecttheactualvalue.
Overall, the Committee considers that the remuneration policy has operated as it intended during 2024, and that the pay outcomes
arealignedwiththeexperienceofshareholdersandotherstakeholders.
Additional information for single figure
remuneration (audited)
Long-term incentives – PSP
Theawardmadeon10March2022for
M Willome and 9 August 2022 for L Liu
underthePSPwassubjecttothe
followingperformancemetrics:
• •
Relative TSR performance
condition–30%
• •
An absolute underlying earnings per
shareperformancecondition–30%
• •
Adhesiveresinsacquisition
synergies–20%
• •
Carbonreduction(Scope1and2)–10%
• •
NPP–10%.
Synthomer plc Annual Report 2024107
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Annual report on remuneration continued
Non-Executive Director Year
Base fee
£
Committee
membership fee
£
Committee
Chair fee
£
Total
£
CA Johnstone 2024 244,400 – – 244,400
2023 235,000 – – 235,000
The Hon. AG Catto 2024 46,597 – – 46,597
2023 44,805 – – 44,805
RC Gualdoni 2024 46,597 15,000 – 61,597
2023 44,805 15,000 – 59,805
Dato’ Lee Hau Hian 2024 46,597 – – 46,597
2023 44,805 – – 44,805
HA Van Deursen 2024 46,597 15,000 10,000 71,597
2023 44,805 15,000 3,134 62,939
I Tyler
1
2024 56,597 15,000 10,000 81,597
2023 51,073 15,000 5,000 71,073
M Flöel 2024 46,597 15,000 – 61,597
2023 14,935 5,000 – 19,935
U Halder
2
2024 15,532 – – 15,532
2023 – – – –
P Hill
3
2024 20,532 – – 20,532
2023 – – – –
Total 2024 570,046 60,000 20,000 650,046
2023 505,147 56,250 8,134 569,531
1 Feeincludesanadditional£10,000forhisroleasSeniorIndependentDirector.
2 AppointedtotheBoard1September2024.
3 AppointedtotheBoard1September2024,asChairdesignate.AppointedasChairfrom1January2025.
Single figure of remuneration for
Non-Executive Directors (audited)
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Annual report on remuneration continued
Director
Interests in
Company shares
31 December
2024
Total unfettered
interests in shares
and vested options
31 December
2024
Deferred
annual
bonus
award
Unvested
performance-related
options
31 December
2024
1, 2
Share
options
exercised
during
2024
Share
ownership
requirements
(% of salary)
3
Interest in
shares at
31 December
2024
(% of salary)
M Willome 110,000 61,775 48,225 945,669 – 220 28%
L Liu 48,675 27,296 21,379 517,005 – 200 18%
CA Johnstone 41,772
The Hon. AG Catto 252,829 and
282,135
4
RC Gualdoni 23,394
Dato’ Lee Hau Hian 163,604
HA Van Deursen 24,000
I Tyler –
M Flöel –
U Halder 25,000
P Hill –
1 Unvestedperformance-relatedoptionscomprisetheawardsmadeunderthePSPin2022,2023and2024.Detailsoftheperformanceconditionsattachedtothe2022awardsare
set out on page 107,andto2024awardsonpage110.
2 The2022and2023shareawardsunderthePSPhavebeenadjustedtoreflecttheimpactoftheshareconsolidationandrightsissue.
3 Untilthisrequirementismet,nosalesofsharesthatvestunderlong-termincentiveplansarepermittedotherthantosatisfytaxliabilitiesthatariseontheexerciseofshareawards
undersuchplans.TheCommitteeconsidersthatunfetteredunexercisedvestednil-costawardsareeconomicallyequivalenttosharesand,assuch,thattheyshouldcount(ona
net-of-taxbasis)towardscompliancewiththeshareownershipguidelines.
4 Non-beneficialinterest.
TherehavebeennochangesintheinterestsoftheDirectorsinsharesbetween31December2024andatsuchtimeasthisreport
wassignedon11March2025.
Directors’ shareholding and
shareinterests (audited)
Synthomer plc Annual Report 2024109
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Annual report on remuneration continued
Scheme Basis of award Number of shares Face value
Percentage vesting
at threshold
performance
M Willome PSP – nil-cost options (primary award) 200% of salary 571,408 £1,403,378 25%
PSP – nil-cost options (additional award) 50% of salary 142,852 £350,844 25%
L Liu PSP – nil-cost options (primary award) 150% of salary 290,099 £712,483 25%
PSP – nil-cost options (additional award) 50% of salary 96,700 £237, 495 25%
Thefacevalueoftheawardswascalculatedusingasharepriceof245.6ppershare,theaveragesharepriceonthefivedealingdays
beforethedateofgrant.
The2024awardsunderthePSParesubjecttothefollowingperformanceconditions:
Primary award
Definition Weighting Threshold (25% vesting) Maximum
Relative TSR Relative TSR performance against the FTSE 250
Index (excluding investment funds and financial
services companies) over the three-year period
ended 31 December 2026
20% Median Upper quartile
EBITDA CAGR (vs 2023) EBITDA compound annual growth rate 30% 8% 20%
Leverage Leverage ratio at 31 December 2026 30%
Targets will be disclosed retrospectively
because of commercial sensitivity
Carbon reduction – in Scope
1 and 2 CO
2
emissions from
the 2019 baseline
Reduction in carbon emissions (Scope 1 and 2)
from the 2019 baseline by 31 December 2026
10% 35% 41%
NPP – by volume over the
five-year period to end 2026
Percentage of Group sales (by volume) in the
financial year 2026 that are derived from NPP
launched in the five years to 31 December 2026
10% 14% 21%
Total 100%
Allmetricsvestonastraight-linebasisbetweenthresholdandmaximum.
Additional award
Fortheadditionalaward,thesoleperformancemeasureisrelativeTSRperformanceversusFTSE250(excludinginvestmenttrusts
andfinancialservicescompanies):
• •
25%ofthiselementwillvestforupper-quartileperformance
• •
100%willvestforupper-decileperformance
• •
Vestingonastraight-linebasisbetweenthesepoints.
2024 awards (audited)
Theawardsmadeon22April2024to
MWillomeandLLiuwereasfollows:
Synthomer plc Annual Report 2024110
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Annual report on remuneration continued
Operation of the Executive Director remuneration policy for 2025
ThecurrentpolicywasapprovedattheAnnualGeneralMeetingon16May2023,andwillbeimplementedasfollows:
Base salary A salary increase was awarded with effect from 1 January 2025 of 3% for the CEO and CFO in line with the average increasefor the
UK management population awarded in the UK.
2025 salaries are:
M Willome: £722,741 L Liu: £489,240
Pension and benefits Pension contributions for Executive Directors are aligned with those of the UK workforce. Executive Directors receive a cash
allowance in lieu of pension contributions, car allowance and private health insurance. Given M Willome has moved from
Switzerland to the UK, the Company also agreed a monthly relocation allowance of £7,800 for a four-year period. The allowance is
grossed up for tax.
2025 cash allowances in lieu of pension contributions are:
M Willome: 7% of salary L Liu: 7% of salary
Annual bonus For 2025, performance under the annual bonus will be measured on the following basis:
• •
60% subject to performance against EBITDA targets
• •
20% subject to performance against operating cash targets
• •
10% subject to performance measures against key SHE targets
• •
10% subject to performance against individual strategic and operational goals.
Targets and objectives for 2025 are, by their financial and commercial nature, considered by the Board to be unsuitable for
disclosure in advance. However, the Committee will provide information on targets and objectives retrospectively.
2025 maximum award opportunity:
M Willome: 150% of salary L Liu: 150% of salary
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Annual report on remuneration continued
PSP For primary awards to be made in 2025, performance will be measured as follows:
• •
20% based on relative TSR performance versus FTSE 250 (excluding investment trusts and financial services companies):
– 25% of this element will vest for median performance
– 100% will vest for upper-quartile performance
– Vesting on a straight-line basis between these points
• •
30% based on EPS:
– 25% of this element will vest for EPS of 10p
– 100% vesting for EPS of 35p
– Vesting on a straight-line basis between these points
• •
30% based on a reduction in leverage, which by its financial nature is considered by the Board to be unsuitable for disclosure in
advance; however, the Committee will provide information on the target retrospectively
• •
20% based on strategic targets, of which half will be a sustainability measure linked to a reduction in carbon dioxide emissions of
up to 45% from the 2019 baseline, with half linked to NPV – defined as gross margin of products launched in past five years
(specifically, launch year plus five years) as a proportion of Group Gross Margin (GM) (NPV GM/Total GM %).
For the additional awards, the sole performance measure will be TSR performance versus FTSE 250 (excluding investment trusts
and financial services companies):
• •
25% of this element will vest for upper-quartile performance
• •
100% will vest for upper-decile performance
• •
Vesting on a straight-line basis between these points.
2025 maximum award opportunity:
• •
M Willome: 250% of salary (200% primary award, 50% additional award)
• •
L Liu: 200% of salary (150% primary award, 50% additional award).
Given the current level of the share price, the Committee has considered the 2025 PSP grants and the potential for windfall gains.
The Committee believes it is critical to ensure that Executive Directors are appropriately incentivised in the context of challenging
market conditions. The Committee has determined, therefore, that it is not appropriate to reduce awards at this stage but will
review at vesting.
Shareholding guidelines
duringemployment
The CEO and CFO are expected to build interests in shares of at least 220% and 200% of salary, respectively.
Chair and Non-Executive Directors The fees to be paid in 2025 to the Chair and the Non-Executive Directors have been increased by 3% in line with the UK wider
workforce from 1 January 2025 to £251,320 and £47,995 respectively.
Synthomer plc Annual Report 2024112
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Annual report on remuneration continued
Performance graph and table
ThegraphandtablebelowallowcomparisonoftheTSRoftheCompanyandtheCEOremunerationoutcomesoverthepast10years.
TSR chart
0
50
100
150
200
250
December
2014
December
2015
December
2016
December
2017
December
2018
December
2019
December
2020
December
2021
December
2022
December
2023
December
2024
Synthomer FTSE 250 (ex investment trusts)
ThechartabovecomparestheTSRperformanceoftheCompanywiththatoftheFTSE250(excludinginvestmenttrusts).Thisis
consideredtobethemostappropriateindexagainstwhichtomakeacomparisonandwaschosenbecauseitrepresentsabroad
equitymarketindexofwhichtheCompanyhashistoricallybeenaconstituentandcontainscompaniesofsimilarcomplexity.
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
CEO CG MacLean CG MacLean CG MacLean CG MacLean CG MacLean CG MacLean
CG MacLean/
M Willome M Willome M Willome M Willome
CEO total single figure
remuneration (£’000)
1,246 1,218 2,516 1,807 890 1,805 2,279 987 1,338 1,551
Bonus
(% of maximum awarded)
69.7 100.0 100.0 76.5 20.0 100.0 95.0 10 40 52
PSP
(% of maximum vesting)
n/a n/a 96.3 86.2 10.0 31.8 64.0 n/a 20 40
TheCEOtotalsinglefigureofremunerationincludessalary,benefitsandpensioncontributionspaidintheyear,togetherwith
bonusesandlong-termincentiveawardsthatvestedbasedonperformanceintheyear.
The2021singlefigurecomprisesthefigureforCGMacLean,whichcoverstheperiodto31October2021,andthefigurefor
MWillome,whichcoverstheperiodfrom1Novemberto31December2021.
Payments to past directors (audited)
SGBennett,whosteppeddownfromthe
BoardinJuly2022,wasentitledtothe
vestingofthePSPawardsmadetohim
in2022.Hedidnotreceiveanyother
remunerationin2024.
Payments for loss of office (audited)
Nopaymentsforlossofofficewere
madeduringtheyear.
Synthomer plc Annual Report 2024113
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Annual report on remuneration continued
Financial year Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio
2024 Option B 31:1 24:1 19:1
2023 Option B 32:1 26:1 19:1
2022 Option B 24:1 21:1 16:1
2021 Option B 54:1 44:1 31:1
2020 Option B 37:1 28:1 22:1
2019 Option B 28:1 23:1 16:1
Theemployeesusedforthepurposesofcompilingthetableabovewereidentifiedonafull-timeequivalentbasisatthepayperiod
duringwhich5April2024fell.OptionB,whichinvolvesidentifyingtheemployeesatthe25th,medianand75thpercentilefromour
genderpaygapreport,waschosenasthecalculationmethodology.Theselectedemployees’payandbenefitsforthecalendaryear
werethencalculatedusingeachelementofemployeeremunerationconsistentwiththeCEOandnoelementofpayhasbeen
omitted.EmployeesforthepurposeofthegenderpaygapareemployeesofSynthomer(UK)Limited(496relevantemployeesasat
thesnapshotdateof5April2024).Theratiowasdeterminedat31December2024.
OptionBisconsideredthesimplestandmostaccuratewayofidentifyingrelevantemployeesforSynthomerwhobestrepresentthe
datapoints.Usingthismethodology,wewereabletoidentifyspecificemployeestomaketherequiredcomparisons.
Theratiodecreasedfor2024,duetotherealignmentofbonusstructuredowntheorganisation.
Thedefinitionofpayusedincludedannualsalary,carallowances,allothercashallowances,allbonusesandincentivescheme
paymentsforservicesdeliveredintheyear,andprivatemedicalinsurance.
Thefollowingtableprovidessalaryandtotalremunerationinformationinrespectoftheemployeesateachquartile:
Financial year Element of pay 25th percentile employee Median employee 75th percentile employee
2024 Salary £42.0k £50.3k £66.7k
Total remuneration £49.3k £66.5k £83.3k
OurCEOpayismadeupofahigherproportionofincentivepaythanthatofthemajorityofouremployees.Thisislikelytointroduce
morevariabilityintheCEO’stotalcompensationand,so,inhispayratio.Thisexplainsthechangeinvaluesacrosstheperiod.
TheBoardhasconfirmedthat,initsview,theratiosareconsistentwiththeCompany’swiderpoliciesonemployeepay,reward
andprogression.
CEO pay ratio
Thefollowingtableprovidespayratio
data in respect of the CEO’s total
remuneration compared to the 25th,
medianand75thpercentileemployee.
Synthomer plc Annual Report 2024114
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Annual report on remuneration continued
Percentage change in remuneration of the Directors and employees
Thetablebelowsetsouttheincreaseinsalary,benefitsandannualbonusoftheDirectorscomparedwithaselectedgroupofemployees.Theparentcompany,Synthomerplc,
doesnothaveanydirectemployees,soacomparatorgroupofemployeesoftheGroup’smainUKtradingsubsidiaryhasbeenused,comprising197employees.TheDirectors
considerthatthisemployeepopulationisthemostrelevantforcomparisonpurposes,consideringgeographicallocationandremunerationstructure.
2024 2023 2022 2021 2020
Director
Salary
and fee %
increase
Benefits %
increase/
(decrease)
Annual
bonus %
increase
Salary
and fee %
increase
Benefits %
increase/
(decrease)
Annual
bonus %
increase
Salary
and fee %
increase
Benefits %
increase/
(decrease)
Annual
bonus %
increase
Salary
and fee %
increase
Benefits %
increase/
(decrease)
Annual
bonus %
increase
Salary
and fee %
increase
Benefits %
increase/
(decrease)
Annual
bonus %
increase
M Willome
1
4.0 0.2 35.2 3.8 3.6 315 n/a n/a n/a n/a n/a n/a n/a n/a n/a
L Liu
2
4.0 3.1 30.4 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
CA Johnstone 4.0 n/a n/a n/a n/a n/a 24.0 n/a n/a 2.5 n/a n/a n/a n/a n/a
The Hon. AG Catto 4.0 n/a n/a n/a n/a n/a 3.0 n/a n/a 5.6 n/a n/a 0.9 n/a n/a
RC Gualdoni
1
3.0 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Dato’ Lee Hau Hian 4.0 n/a n/a n/a n/a n/a 3.0 n/a n/a 2.8 n/a n/a 1.6 n/a n/a
HA Van Deursen 13.8 n/a n/a 5.3 n/a n/a 2.2 n/a n/a 3.6 n/a n/a 1.3 n/a n/a
I Tyler
2
14.8 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
M Flöel
3
209.0 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
U Halder
4
n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
P Hill
4
n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Average change
foremployees 7.0 21.3 59.9 5.8 42.4 166.7 2.1 19.6 (73.2) 2.6 3.2 36.5 1.4 n/a n/a
1 MWillomeandRCGualdoniwereappointedtotheBoardin2021.
2 LLiuandITylerwereappointedtotheBoardin2022,soonlyhadapart-yearsalaryfor2022.
3 MFlöeljoinedtheBoardin2023.
4 UHalderandPHilljoinedtheBoardinSeptember2024.
Relative importance of spend on pay
ThetablebelowshowstherelativeimportanceoftheGroup’sall-employeeremunerationexpensecomparedwithreturnstoshareholdersbywayofdividends.
Financial year
2024
£m
2023
£m % change
Dividends paid 0 0 0%
Total employee remuneration 251.5 245.2 2.6%
Dividendsarethedividendspaidintheyear.Therewerenodividendspaidin2023or2024.Totalemploymentremunerationistheconsolidatedsalaryandbonuscostfor
allGroupemployees.
Synthomer plc Annual Report 2024115
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Annual report on remuneration continued
Key duties of the Committee
During2024,theCommitteewasresponsiblefordeterminingtheremunerationoftheExecutiveCommitteeandforreviewing
remunerationelsewhereintheGroup–includingreviewingworkforceremunerationandrelatedpoliciestomakesureincentives
andrewardarealignedwithculture.
Advisers
TheCEO,CompanySecretaryandChiefHumanResourcesOfficerareinvitedtoattendCommitteemeetingstocontributetothe
Committee’sdeliberations.However,noindividualisinvolvedindiscussions,orispartofanydecisions,relatingtotheirownremuneration.
TheCommitteereceivedindependentadvicefromDeloitteLLP(Deloitte),whichitappointedasitsindependentremuneration
adviserinApril2013,followingatenderprocess.
During the year, Deloitte provided advice on governance and market trends and other remuneration matters that materially assisted
theCommittee.ThefeespaidtoDeloitteinrespectofthisworkwerechargedonatime-and-expensesbasisandtotalled£94,750
foradvicein2024.
TheCommitteeiscomfortablethattheDeloitteengagementteamprovidingitwithremunerationadvicedoesnothaveconnections
withtheCompanyoritsDirectorsthatmayimpairitsindependence.TheCommitteereviewedthepotentialforconflictsofinterest
andjudgedthattherewereappropriatesafeguardsagainstsuchconflicts.Deloittealsoprovidedtaxservicesandsupported
managementwithareviewoffinancialandoperationalperformanceinpartoftheGroup.TheCommitteewassatisfiedthatthisdid
notcompromisetheindependenceoftheadvicereceived.
DeloitteisafoundingmemberoftheRemunerationConsultantsGroupandadherestoitsCodeofConduct.Deloittewasappointed
directlybytheCommittee,andtheCommitteeissatisfiedthattheadvicereceivedwasobjectiveandindependent.
Statement of voting at the Annual General Meeting
ThetablebelowsetsouttheresultsofthevotesontheDirectors’RemunerationReportattheAGMon9May2024andtheDirectors’
RemunerationPolicyon16May2023.
WhileweweredisappointedbythelevelofsupportfortheRemunerationReportatourAGMinMay2024,werecogniseand
understandthefrustrationexpressedbysomeshareholdersregardingtheir2023experience.Subsequentengagementwithkey
shareholdersprovidedvaluableinsightswhichalongsideotherfactors,informedboththe2024remunerationoutcomesandthe
designofthe2025performancemetrics.TheCommitteeremainscommittedtoensuringthesemetricsandincentiveoutcomes
appropriatelybalanceexecutivemotivationwiththedeliveryofshareholdervalue.
Votes for Votes against Votes withheld
Number % of vote Number % of vote Number
2023 Directors’ remuneration report 71,624,948 55.40 57,668,772 44.60 26,588
2023 Directors Remuneration Policy 331,283,004 86.87 50,072,165 13.13 38,250
By order of the Board
Anant Prakash
Company Secretary
11 March 2025
External appointments
Executive Directors are permitted to
acceptexternalappointmentswiththe
approval of the Board, provided that
there is no adverse impact on their role
anddutiestotheCompany.Anyfees
arising from such appointments may be
retained by the Executive Directors
wheretheappointmentisunrelatedto
theGroup’sbusiness.
M Willome has been a non-executive
directorofGlastonOyj(NasdaqHelsinki)
since May 2020 and received a Board
membershipfeeof€45,000in2024.M
Willome has sat on European subsidiary
boards of Indutrade AB since 2013 and
received a board membership fee of
CHF30,000in2024.
L Liu has been a non-executive director
of DCC plc since 2021 and received a
boardmembershipfeeof€90,125
in2024.
Remuneration Committee
Remuneration Committee membership
since1January2024:
HA Van Deursen (Chair)
RC Gualdoni
I Tyler
M Flöel
Attendance at Committee meetings is
set out on page 69.
Synthomer plc Annual Report 2024116
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Other regulatory disclosures
The Directors submit their Annual Report and
theaudited consolidated financial statements
forthe year ended 31 December 2024. None of
the matters required to be disclosed by UK Listing
Rule 6.6.1R applies to the Company, except for:
• •
Theamountofcapitalisedinterest–seenote21 to
thefinancialstatements
• •
Detailsoflong-termincentiveprogrammes–see
Directors’ remuneration report on pages 98 to 100.
• •
Shareholderwaiverofdividends–seenote12 to the
financialstatements.
The Directors’ report is covered on pages 65 to 116 as
wellasinthefollowingsectionsoftheAnnualReport:
Item
Location in
AnnualReport
Statement of Directors’ responsibilities Page 119
Financial risk management Financial statements
– note 22
Present Board membership Pages 70 to 73
Governance report Pages 65 to 119
Strategic report
(including principal activities)
Pages 2 to 10
Management of risk and
viabilitystatement
Pages 62 to 63
Employee engagement Pages 78 to 79
Directors’ remuneration report Pages 98 to 100
Share capital Financial statements
– note 27
Greenhouse gas emissions Pages 191 to 194
Sustainability report Pages 26 to 31
Results and dividends
Thelossattributabletoshareholderswas£72.6m.
In2022,theBoardannouncedthesuspensionof
dividends.TheBoardhasconfirmedthatdividends
willremainsuspendedatleastuntiltheGroup’snet
debttoEBITDAratioislessthan3x.
Acquisitions and divestments
In April 2024, the Company completed the sale of its
latex compounding operations in the Netherlands
andEgypt.
Directors
AlltheDirectorswillseekelectionorretireandseek
re-electionattheforthcomingAGM.
None of the Directors seeking re-election has a service
contractexceptMichaelWillomeandLilyLiu,who
bothhaveservicecontractsthatcontaina12-month
noticeperiod.
Director indemnity provisions
Under the Company’s Articles of Association, the
DirectorsoftheCompanyhavethebenefitofa
qualifyingthird-partyindemnityprovision.Thismeans
theCompanyindemnifiesthemagainstcertainliabilities,
as permitted by Sections 232 and 234 of the Companies
Act 2006, and against costs incurred by them in relation
toanyliabilityforwhichtheyareindemnified.The
Company has purchased and maintains insurance
againstDirectors’andOfficers’liabilitiesinrelationto
theCompany.
UK pension funds
Thetrusteeshavereviewedtheindependentinvestment
management of the assets of the Company’s UK
pension schemes and assured themselves of the
securityandcontrolsinplace.Inparticular,itisthe
trustees’ policy not to invest in Synthomer plc shares
norlendmoneytotheCompany.
Share capital and control
The Company’s Articles of Association set out the rights
and obligations attached to the Company’s ordinary
shares, being the only class of issued share capital,
alongsidethepowersoftheCompany’sDirectors.
Copies can be obtained from Companies House or
downloadedfromtheCompany’swebsite
(Synthomer.com).Therearenorestrictionsonthe
voting rights attached to the Company’s ordinary shares
oronthetransferofsecuritiesintheCompany.No
person holds securities in the Company that carry
specialrightswithregardtothecontroloftheCompany.
TheCompanyisnotawareofanyagreementsbetween
holders of securities that may result in restrictions on
thetransferofsecuritiesoronvotingrights.Unless
expresslyspecifiedtothecontraryintheCompany’s
Articles of Association, those Articles of Association
may be amended by special resolution of the
Company’sshareholders.
Otherthaninrelationtoitsborrowings,whichbecome
repayable on a takeover unless certain conditions are
satisfied,theCompanyisnotpartytoanysignificant
agreementsthatwouldcomeintoeffect,alteror
terminate on a change of control prompted by a
takeoverbid.TheCompanydoesnothaveagreements
withanyDirectororemployeethatwouldprovide
compensationforlossofofficeoremployment
resultingfromatakeover.
Synthomer plc Annual Report 2024117
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Other regulatory disclosures continued
All the Company’s share programmes contain
provisionsrelatingtoachangeofcontrol.Outstanding
optionsandawardswouldnormallyvestandbecome
exercisableonachangeofcontrol,subjecttothe
satisfactionofanyperformanceconditionsatthattime.
Interests disclosed under DTR 5
Asat31December2024,thefollowinginformationhadbeen
receivedbytheCompany,inaccordancewithChapter5of
the Disclosure Guidance and Transparency Rules (DTRs),
fromholdersofnotifiableinterestsintheCompany’s
issuedsharecapital.Itshouldbenotedthatthese
holdingsmayhavechangedsincetheywerenotified
totheCompany.Substantialshareholdersdonothave
differentvotingrightsfromthoseofothershareholders.
Ordinary
shares
(number)
Percentage
of total
voting rights
*
Kuala Lumpur Kepong
BerhadGroup
43,986,318 27%
Greater Manchester PensionFund 9,719,706 5.94%
Lombard Odier Asset
Management (Europe) Limited
8,790,432 5.37%
Janus Henderson Group plc 8,241,151 5.04%
Artemis Investment
Management LLP
8,234,039 5.03%
*Percentagebasedonordinarysharesinissue,asatthedatethenotification
wasreceivedbytheCompany.
Between31December2024and11March2025,being
the latest practicable date before the publication of this
Annual Report, the Company received no further
notificationsunderDTR5.
Employment policies and employee involvement
TheGroupgiveseveryconsiderationtojobapplications
fromdisabledpeople.Employeeswhobecomedisabledare
giveneveryopportunitytocontinueworkingforSynthomer
undernormaltermsandconditionswithappropriate
training,careerdevelopmentandpromotionwherever
possible.TheGroupseekstoachieveequalopportunities
inemploymentthroughrecruitmentandtrainingpolicies.
The Group encourages employee involvement in its
affairs.TheCompanyregularlyengageswithemployees
tomakethemawareofthefinancialandeconomic
factorsaffectingGroupperformance.Performance-
related bonus programmes operate throughout the
Group.AlexanderCatto(supportedbyHollyVan
Deursen) is the designated Non-Executive Director
responsibleforgatheringtheviewsofemployees.More
informationontheBoard’semployeeengagementwork
can be found on pages 36 and 37.TheGroup’sapproach
to diversity and inclusion is explained on page 37.
Authority to purchase own shares
At the 2024 AGM, shareholders passed a special
resolutiontoauthorisetheCompany,subjecttocertain
conditions, to purchase on the market a maximum of
16,356,762 ordinary shares, at that time representing
approximately10%oftheCompany’sissuedshare
capital.Thisauthoritywillexpireattheconclusionof
the2025AGM.TheDirectorsareseekingtherenewal
ofthisauthorityatthe2025AGM.
Subsidiaries
AlltheGroup’ssubsidiaries,jointventuresandrelated
undertakings are listed on pages 187 to 189.
Statement as to disclosure of information
toauditors
EachDirectoroftheCompanyconfirmsthat,tothebest
oftheirknowledge,theCompany’sauditorsareaware
ofallrelevantauditinformation.EachDirectoralso
confirmsthattheyhavetakenallnecessarystepsasa
Directortomakethemselvesawareofanyrelevantaudit
information and to establish that the information has
beensharedwiththeCompany’sauditors.Forthese
purposes, relevant audit information means information
neededbytheCompany’sauditorinconnectionwith
preparing its report on pages 121 to 127.This
confirmationisgivenandshouldbeinterpretedin
accordancewithSection418oftheCompaniesAct2006.
Going concern
TheDirectorshaveacknowledgedthelatestguidance
on going concern and, in reaching their conclusions,
have considered factors that include:
• •
The$400mRCF,whichwasputinplacein
September2023andmaturesinJuly2027,
subsequentlyreducedto€300minMarch2024
• •
TheUKExportFinancefacilitiesof€288mand$230m,
whichwereputinplaceinOctober2022andmaturein
October 2027
• •
The€350m7.375%unsecuredseniorloannotesduein
May2029,andthe€520m3.875%unsecuredseniorloan
notesdueinJune2025,ofwhich€150misoutstanding.
Aftermakingenquiriesandconsideringreasonably
possible changes in trading performance, the Directors
aresatisfiedthat,atthetimeofapprovingthefinancial
statements, it is appropriate to adopt the going concern
basisinpreparingthefinancialstatementsofboththe
GroupandCompany.
Political donations
Nopoliticaldonationsweremadeintheyear(2023:nil).
Independent auditors
AresolutiontoappointPricewaterhouseCoopersLLP
(PwC)astheCompany’sauditorswillbeproposedat
thenextAnnualGeneralMeeting.
Annual General Meeting
TheAnnualGeneralMeetingwillbeheldattheoffices
oftheCompanyat45PallMall,LondonSW1Y5JG
on1May2025at11.00am.
By order of the Board
Anant Prakash
Company Secretary
11 March 2025
Synthomer plc Annual Report 2024118
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Statement of Directors’ responsibilities
The Directors are responsible for preparing the
Annual Report, including the Strategic report,
Governance report and financial statements, in
accordance with applicable laws and regulations.
CompanylawrequirestheDirectorstoprepare
consolidatedfinancialstatementsforeachfinancial
yearinaccordancewithIFRS,asadoptedbytheUK.
TheDirectorshaveelectedtoprepareparentcompany
financialstatementsinaccordancewithUK-adoptedIAS,
comprisingFRS101.
Inaddition,companylawrequiresthatDirectorsmust
notapprovethefinancialstatementsunlesstheyare
satisfiedthattheygiveatrueandfairviewofthestate
ofaffairsoftheGroupandCompanyandoftheprofit
orlossoftheGroupandCompanyforthatperiod.In
preparingthefinancialstatements,theDirectorsare
requiredto:
• •
Select suitable accounting policies and apply them
properly and consistently
• •
Makejudgementsandaccountingestimatesthat
arereasonableandprudent
• •
Present information in a manner that is relevant,
reliable and comparable
• •
Provideadditionaldisclosureswhencompliancewith
thespecificrequirementsinIFRSareinsufficientto
enable users to understand the impact of particular
transactions, other events and conditions on the
entity’sfinancialpositionandfinancialperformance
• •
Assess the Group’s and Company’s ability to
continueasagoingconcern.
The Directors are responsible for safeguarding the
assets of the Group and Company and so for taking
reasonable steps to prevent and detect fraud and
otherirregularities.
TheDirectorsarealsoresponsibleforkeepingadequate
accountingrecordsthataresufficienttoshowand
explain the Group and Company’s transactions, and
todisclosewithreasonableaccuracyatanytimethe
financialpositionoftheGroupandCompanyandenable
themtoensurethatthefinancialstatementscomply
withtheCompaniesAct2006.
The Directors are responsible for the maintenance
andintegrityofthecorporateandfinancialinformation
includedontheCompany’swebsite(Synthomer.com).
Legislation in the UK governing the preparation and
disseminationoffinancialstatementsmaydiffer
fromlegislationinotherjurisdictions.
Fair, balanced and understandable
On the advice of the Audit Committee, the Board
considers the Annual Report and Accounts, taken as
awhole,tobefair,balancedandunderstandable,and
provides the information necessary for shareholders
toassesstheGroupandCompany’sposition,
performance,businessmodelandstrategy.
Disclosing information to the auditor
InlinewithSection418oftheCompaniesAct2006,the
Directorsconfirmthat,asfarastheyareeachaware,
there is no relevant audit information that has not been
broughttotheattentionoftheCompany’sauditor.Each
Director has taken all reasonable steps that they ought
tohavetakeninlinewiththeirdutyasaDirectortomake
themselvesawareofanyrelevantauditinformationand
tomakesurethattheCompany’sauditorisawareof
thatinformation.
Directors’ responsibility statement
The Directors consider that, to the best of each person’s
knowledge,the:
• •
Financialstatements,takenasawhole,whichhave
beenpreparedinlinewithIFRSasadoptedbytheUK,
giveatrueandfairviewoftheassets,liabilities,financial
positionandprofitorlossoftheGroupandCompany
• •
Strategicreport,takenasawhole,includesafair
reviewofthedevelopmentandperformanceof
thebusinessandthepositionoftheGroupand
Company,togetherwithadescriptionofthe
principalrisksanduncertaintiesthattheyface.
Cautionary statement
The purpose of this report is to provide information
tothemembersoftheCompany.Itcontainscertain
forward-lookingstatementswithrespecttothe
operations,performanceandfinancialconditionof
theGroup.Bytheirnature,thesestatementsinvolve
uncertainty, since future events and circumstances
cancauseresultsanddevelopmentstodiffermaterially
fromthoseanticipated.Theforward-lookingstatements
reflectknowledgeandinformationavailableatthe
dateofpreparationofthisreport,andtheCompany
isundernoobligationtoupdatetheseforward-looking
statements.Nothinginthisreportshouldbeconstrued
asaprofitforecast.
Details of the Company’s Directors and their roles
arelistedonpages70 - 73.
Approved by the Board of Directors on 11 March 2025
and signed on its behalf by
Lily Liu
ChiefFinancialOfficer
Synthomer plc Annual Report 2024119
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Delivering
69% of our new products have defined sustainability
benefits that meet customers’ needs.
Financial statements
Group financial statements
121 Independent auditors’ report
128 Consolidatedincomestatement
129 Consolidatedstatementofcomprehensiveincome
130 Consolidatedstatementofchangesinequity
131 Consolidated balance sheet
133 Consolidatedcashflowstatement
134 Reconciliationofnetcashflowfromoperating
activitiestomovementinnetdebt
135 Notestotheconsolidatedfinancialstatements
Company financial statements
180 Companystatementoffinancialposition
182 Companystatementofchangesinequity
183 NotestotheCompanyfinancialstatements
STRATEGIC REPORT GOVERNANCE REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
Synthomer plc Annual Report 2024120
Independent auditors’ report
to the members of Synthomer plc
Reportontheauditofthefinancialstatements
Opinion
In our opinion:
• •
Synthomer plc’s Group financial statements and Company financial statements (the
financial statements) give a true and fair view of the state of the Group’s and of the
Company’s affairs as at 31 December 2024 and of the Group’s loss and the Group’s cash
flows for the year then ended
• •
The Group financial statements have been properly prepared in accordance with
UK-adopted international accounting standards as applied in accordance with the
provisions of the Companies Act 2006
• •
The Company financial statements have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting
Standards, including FRS 101 Reduced Disclosure Framework, and applicable law)
• •
The financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
Wehaveauditedthefinancialstatements,includedwithintheAnnualReport2024(the
AnnualReport),whichcomprise:theConsolidatedbalancesheetandtheCompany
statementoffinancialpositionasat31December2024;theConsolidatedincomestatement,
the Consolidated statement of comprehensive income, the Consolidated statement of
changesinequity,theCompanystatementofchangesinequity,theConsolidatedcashflow
statementandtheReconciliationofnetcashflowfromoperatingactivitiestomovementin
netdebtfortheyearthenended;andthenotestothefinancialstatements,comprising
materialaccountingpolicyinformationandotherexplanatoryinformation.
OuropinionisconsistentwithourreportingtotheAuditCommittee.
Basis for opinion
WeconductedourauditinaccordancewithInternationalStandardsonAuditing(UK)(ISAs(UK))
andapplicablelaw.OurresponsibilitiesunderISAs(UK)arefurtherdescribedintheAuditors’
responsibilitiesfortheauditofthefinancialstatementssectionofourreport.Webelievethatthe
auditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.
Independence
WeremainedindependentoftheGroupinaccordancewiththeethicalrequirementsthat
arerelevanttoourauditofthefinancialstatementsintheUK,whichincludestheFRC’s
EthicalStandard,asapplicabletolistedpublicinterestentities,andwehavefulfilledour
otherethicalresponsibilitiesinaccordancewiththeserequirements.
Tothebestofourknowledgeandbelief,wedeclarethatnon-auditservicesprohibitedby
theFRC’sEthicalStandardwerenotprovided.
Otherthanthosedisclosedinnote7totheconsolidatedfinancialstatements,wehave
providednonon-auditservicestotheCompanyintheperiodunderaudit.
Our audit approach
Overview
Audit scope
• •
Auditproceduresprovidecoverageof77%ofrevenue
• •
Auditscopecoversproceduresover12significantcomponentsduetoriskorsize,
across7countries
Key audit matters
• •
Impairmentofgoodwillassets–ASandHPPM(Group)
• •
Valuationofdefinedbenefitpensionobligations(Group)
• •
Presentation of Special Items (Group)
• •
Recoverabilityofinvestmentin,andamountsowedby,Groupundertakings(parent)
Materiality
• •
OverallGroupmateriality:£9,900,000(2023:£9,105,000)basedon0.5%ofrevenue
(2023:approximately5%ofthree-yearweightedaverageofunderlyingprofitbeforetaxation).
• •
OverallCompanymateriality:8,910,000(2023:8,194,000)basedon1%oftotalassets
cappedat90%ofGroupmateriality.
• •
Performancemateriality:£7,425,000(2023:£6,828,750)(Group)and£6,682,000
(2023:£6,145,000)(Company).
The scope of our audit
Aspartofdesigningouraudit,wedeterminedmaterialityandassessedtherisksofmaterial
misstatementinthefinancialstatements.
Key audit matters
Keyauditmattersarethosemattersthat,intheauditors’professionaljudgement,wereof
mostsignificanceintheauditofthefinancialstatementsofthecurrentperiodandinclude
themostsignificantassessedrisksofmaterialmisstatement(whetherornotduetofraud)
identifiedbytheauditors,includingthosewhichhadthegreatesteffecton:theoverallaudit
strategy;theallocationofresourcesintheaudit;anddirectingtheeffortsofthe
engagementteam.Thesematters,andanycommentswemakeontheresultsofour
proceduresthereon,wereaddressedinthecontextofourauditofthefinancialstatements
asawhole,andinformingouropinionthereon,andwedonotprovideaseparateopinionon
thesematters.
Thisisnotacompletelistofallrisksidentifiedbyouraudit.
Thekeyauditmattersbelowareconsistentwithlastyear.
Synthomer plc Annual Report 2024121
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FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Independentauditors’reporttothemembersofSynthomerplccontinued
Key audit matter How our audit addressed the key audit matter
Impairment of goodwill assets - AS and HPPM (Group)
As set out in note 14, the Group had goodwill of £100.6m (2023: £145.2m) at
31 December 2024, after an impairment of £nil (2023: £nil).
This is significant in the context of the overall balance sheet of the Group. We consider
this to be a key audit matter because the estimates underlying the recoverability of
goodwill are subject to high estimation uncertainty, particularly in a year where the
Group’s performance has significantly deteriorated.
Management’s assessment of the ‘value in use’ of the Group’s cash generating units
(CGU) involves judgements about the future results of the businesses, particularly
assumptions around long-term growth rates and the weighted average cost of capital
applied to future cash flow forecasts, where there is a higher degree of sensitivity.
Procedures performed included:
• •
Understanding business processes and controls related to the assessment of the
carryingvalueofgoodwillforimpairment.
• •
Assessing the reasonableness of the impairment model and understanding
management’sprocessandjudgementsutilisedfordevelopingestimatesand
assumptions.Thisincludedtestingoftheunderlying‘value-in-use’calculations.
• •
Agreeingtheinputsinmanagement’simpairmentmodeltoBoard-approvedplans.
• •
Performingaretrospectivereviewofthepreviousperiodestimatesbycomparingthis
toactualresultsinthecurrentperiod.
• •
Engaging our internal valuation specialists to assess the reasonableness of the
weightedaveragecostofcapitalandlong-termgrowthrateassumptionsusedby
management.
• •
Assessingcorroboratingorcontradictoryevidencerelatingtosignificantassumptions
inthecashflowprojections.
• •
Performingsensitivityanalysesbasedonreasonablypossibleoutcomes.
• •
Checkingthemathematicalaccuracyofthecalculations.
• •
Assessingtheeffectofclimatechangeincludedinmanagement’scashflowforecast.
• •
Reviewingthedisclosuresinthefinancialstatementsinrespectofthecarryingvalueof
goodwill.Basedontheproceduresperformed,weconcludedthatnoimpairmentwas
required.Wealsoconsiderthedisclosuresinthefinancialstatementstobeappropriate.
Valuation of defined benefit pension obligations (Group)
As set out in note 26, the Group had £49.7m (2023: £64.7m) net liabilities as at
31 December 2024 in relation to defined benefit pension schemes.
This primarily represents the Yule Catto group retirement benefits scheme in the UK
with defined benefit obligation of £251.2m (2023: of £269.6m), the OMNOVA Solutions
Consolidated Pension Plan in the USA with defined benefit obligation of £157.6m (2023:
£166.5m) and an unfunded scheme in Germany with defined benefit obligation of
£57.8m (2023: £63.0m).
The Group uses third-party actuaries to calculate pension obligations. The valuation of
these obligations is based on a number of assumptions and the calculation is highly
sensitive to small changes in the assumptions. For instance, changes in inflation,
mortality tables and discount rates can have a significant impact on the valuation of the
obligation recorded.
In order to assess the identified risks:
• •
WereviewedexternalactuarialreportsoftheUKandGermanschemeswhichset
outthecalculationsandassumptionsunderpinningtheyear-endpensionscheme
obligationsvaluation,andourUSAcomponentteamreviewedanexternalactuarial
reportfortheUSAscheme.
• •
We(andPwCUS)helddiscussionswiththeexternalactuariesandweresatisfiedthat
thescopeoftheirworkwassuchthatwecouldusethisworktoprovideevidencefor
thepurposeofouraudit.
• •
Weassessedthecompetencyandobjectivityoftheexternalactuariestoperform
theyear-endcalculationsbyconsideringtheirtechnicalexpertiseandindependence
fromtheGroup.
• •
Weusedourownspecialistactuarialteamtoevaluatethekeyassumptionsusedin
each of the three schemes by comparing these assumptions to our expectations for
similarschemesasattheyearend.
• •
Wealsoconsideredtheappropriatenessofthedisclosureswithinthefinancial
statements.Basedontheoutcomeofourproceduresassetoutabove,wehave
concludedthatthepensionassumptionsarewithinareasonablerangeandthat
thedefinedbenefitobligationsareappropriatelyvaluedasofthe31December2024
yearend.
Synthomer plc Annual Report 2024122
STRATEGIC REPORT GOVERNANCE REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Independentauditors’reporttothemembersofSynthomerplccontinued
Key audit matter How our audit addressed the key audit matter
Presentation of Special Items (Group)
The Group presents two measures of performance in the income statement; statutory
and underlying, the latter after adjusting for certain items of income or expenses
(Special Items), as management believes these measures provide additional useful
information on the underlying trends, performance and position of the Group.
The determination of which items of income or expense are classified as Special Items
is subject to judgement and therefore users of the financial statements could be misled
if amounts are not classified or calculated appropriately.
Description of the amounts presented as Special Items are included in note 4 to the
financial statements.
We considered the appropriateness of amounts classified as special items. To do this
we considered:
• •
The Group’s accounting policy on Special Items and pronouncements by the Financial
ReportingCouncilonthismatter.
• •
WeassessedtheincomeandexpensesclassifiedasSpecialItemsagainsttheGroup’s
accountingpolicies.
• •
WechallengedmanagementontheappropriatenessoftheclassificationofsuchSpecial
Items,beingmindfulthatclassificationshouldbeeven-handedbetweengainsandlosses,
thebasisoftheclassificationshouldbeclearlydisclosedandaclearreconciliationto
statutorymeasuresprovidedandappliedconsistentlyoneyeartothenext.
• •
WechallengedmanagementonthequantumoftheSpecialItems,andtheestimates
underpinninganumberoftheseitems.
Having considered the nature and quantum of these items, overall we are satisfied
thatthe presentation of Special Items in the financial statements for the year ended
31 December 2024 is materially appropriate and consistent with the previous years.
Recoverability of investment in, and amounts owed by, Group undertakings (parent)
As disclosed in notes 3 and 6 of the Company’s financial statements, the company held
an investment in subsidiaries of £896.2m (2023: £737.2m) and amounts owed by Group
undertakings of £2,256,2m (2023: £1,991.1m) at 31 December 2024.
The assessment of the recoverability of these assets required the application of
management judgement, particularly in determining whether any impairment indicators
have arisen that trigger the need for a formal impairment assessment and in assessing
whether the carrying value of each investment and amounts owed by Group
undertakings are recoverable. As changes to these judgements and estimates could
have a material impact on the Company’s financial statements, we consider this to be a
key audit matter.
Our procedures included the following:
• •
Assessingtherecoverablevaluewithreferencetothenetassetsoftheunderlying
subsidiariesandamountsowedbyGroupundertakingswithreferencetotheDirectors’
intentionsforthesettlementofGroup-wideintercompanybalances.
• •
Verifyingthattherecoverablevaluesoftheinvestmentwasconsistentwiththe
recoverablevalueoftheCGUstestedforgoodwillimpairmentpurposes,leveragingthe
auditworkundertakenaspartoftheGroupaudit.Basedontheproceduresperformed,
wenotednomaterialissues.
How we tailored the audit scope
Wetailoredthescopeofouraudittoensurethatweperformedenoughworktobeableto
giveanopiniononthefinancialstatementsasawhole,takingintoaccountthestructureof
the Group and the Company, the accounting processes and controls, and the industry in
whichtheyoperate.
As set out in note 5 ‘Segmental analysis’, the Group reports its results as three segments:
‘Coatings&ConstructionSolutions’,‘AdhesiveSolutions’;and‘Health&Protectionand
PerformanceMaterials’.TheGroup’sfinancialstatementsareaconsolidationofreporting
units, being holding companies, intermediate holding companies and operating companies,
acrossmorethan20countries.Twocountries,beingtheUSAandGermany,accountfora
significantportionoftheGroup’sresults.Weaccordinglyfocusedourworkonfiveofthe
reportingunitsinthesecountries,whichweresubjecttoauditsoftheirfinancialinformation.
Inaddition,toincreaseourcoverageoftheGroup’srevenue,weperformedauditprocedures
onanadditionalsevenreportingunitslocatedintheUK,Malaysia,theCzechRepublic,France
andtheNetherlands.Allofthesecomponentsaccountedfor77%oftheGroup’srevenue.
Whereworkwasperformedbycomponentauditors,wedeterminedthelevelofinvolvement
weneededtohaveintheauditworkatthosereportingunitstobeabletoconcludewhether
sufficientappropriateauditevidencehadbeenobtainedasabasisforouropiniononthe
Group’sfinancialstatementsasawhole.Duringtheaudit,seniormembersoftheGroup
teamheldanumberofmeetingswithallofthecomponentteamsandreviewedthework
performedbytheseteamsoverthoseareasofhigherauditrisk.TheGroupauditpartner
alsovisitedMalaysiaaspartoftheauditplanningandcompletionprocesses.
AttheGrouplevel,wealsocarriedouttargetedanalyticalproceduresonnon-significant
componentsnotcoveredbytheproceduresdescribedabove.TheGroupengagementteam
alsoperformedauditproceduresovertheconsolidationprocess.
Synthomer plc Annual Report 2024123
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FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Independentauditors’reporttothemembersofSynthomerplccontinued
Synthomerplc(theCompany)wasinfullscopeandtheauditproceduresovertheCompany’s
transactionsandbalanceswereperformedbytheGroupauditteam.TheCompany’s
materialfinancialstatementlineitemswhichwereinscopefortheGroupauditareother
intangibleassets,cashandcashequivalents,borrowingsandotherpayables.TheCompany
is also audited on a standalone basis, and hence, testing has been performed on all material
financialstatementlineitemsincludedintheCompanystandalonefinancialstatements.
The impact of climate risk on our audit
Aspartofouraudit,wemadeenquiriesofmanagementtounderstandtheprocess
management has adopted to assess the extent of the potential impact of climate risk on the
Group’sfinancialstatementsandsupportthedisclosuresmadewithintheTaskForceon
Climate-relatedFinancialDisclosures(TCFD)report.Inadditiontoenquirieswith
management,wealsoreadthegovernanceprocessesinplacetoassessclimaterisk.We
challenged the completeness of management’s climate risk assessment by reading the
Group’swebsite/communicationsfordetailsofclimate-relatedimpacts.Managementhave
madecommitmentstoachievenetzerocarbonemissionsby2050,andwithVision2030
theyareworkingontheirpathwaytowardsthis.Managementconsiderstheimpactof
climateriskdoesnotgiverisetoapotentialmaterialfinancialstatementimpact.Usingour
knowledgeofthebusiness,weevaluatedmanagement’sriskassessmentanditsestimates
assetoutinnote2ofthefinancialstatementsandresultingdisclosureswheresignificant.
Weconsideredimpairmentofnon-currentassets,especiallyimpairmentofgoodwilland
intangible assets, as the area to potentially be materially affected by climate risk, and
consequentlywefocusedourauditworkinthisarea.Torespondtotheauditrisksidentified
inthisarea,wetailoredourauditapproachtoaddressthese,inparticular,wechallenged
managementonhowtheimpactofclimatecommitmentsmadebytheGroupwouldaffect
theassumptionswithinthediscountedcashflowspreparedbymanagementthatareusedin
theGroup’simpairmentanalysis.Wealsoconsideredtheconsistencyofthedisclosuresin
relationtoclimatechange(includingthedisclosuresintheTCFDsection)withintheAnnual
Reportwiththefinancialstatementsandourknowledgeobtainedfromouraudit.Our
proceduresdidnotidentifyanymaterialimpactinthecontextofourauditofthefinancial
statementsasawhole,orourkeyauditmattersfortheyearended31December2024.
Materiality
Thescopeofourauditwasinfluencedbyourapplicationofmateriality.Wesetcertain
quantitativethresholdsformateriality.These,togetherwithqualitativeconsiderations,
helped us to determine the scope of our audit and the nature, timing and extent of our
auditproceduresontheindividualfinancialstatementlineitemsanddisclosuresandin
evaluatingtheeffectofmisstatements,bothindividuallyandinaggregateonthefinancial
statementsasawhole.
Basedonourprofessionaljudgement,wedeterminedmaterialityforthefinancial
statementsasawholeasfollows:
Financial statements – Group Financial statements – Company
Overall materiality £9,900,000
(2023: £9,105,000).
£8,910,000
(2023: £8,194,000).
How we
determinedit
0.5% of revenue (2023:
approximately 5% of three-year
weighted average of underlying
profit before taxation)
1% of total assets capped at
90% of Group materiality
Rationale for
benchmark applied
In determining materiality, we
considered both profit before tax
and revenue as the acceptable
benchmarks. We considered
profit before tax to be an
appropriate benchmark as it
isone of the key metrics for
investors and is used by the
Board in measuring the Group’s
financial performance. We
considered total revenue to be
appropriate given the focus of
investors on revenues and top
line growth. This provided a wide
range of acceptable materiality
levels. In our judgement, the
Group is currently experiencing
volatile profits or losses but
less volatile revenues and
theiroperations remain largely
consistent year on year. We
therefore consider revenue
toremain an appropriate
benchmark to use. The
materiality selected therefore
isconsistent at 0.5% of revenue
based on which we determined
a materiality of £9,900,000.
We believe that total assets is
the primary measure used by
the shareholders in assessing
the performance of the
Company, and is a generally
accepted benchmark. The
value is capped for the
purposeof the Group audit with
reference to Group materiality.
ForeachcomponentinthescopeofourGroupaudit,weallocatedamaterialitythatisless
thanouroverallGroupmateriality.Therangeofmaterialityallocatedacrosscomponents
wasbetween£1,000,000to£9,000,000.Certaincomponentswereauditedtoalocal
statutoryauditmaterialitythatwasalsolessthanouroverallGroupmateriality.
Synthomer plc Annual Report 2024124
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FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Independentauditors’reporttothemembersofSynthomerplccontinued
Weuseperformancematerialitytoreducetoanappropriatelylowleveltheprobabilitythat
theaggregateofuncorrectedandundetectedmisstatementsexceedsoverallmateriality.
Specifically,weuseperformancematerialityindeterminingthescopeofourauditandthe
nature and extent of our testing of account balances, classes of transactions and
disclosures,forexampleindeterminingsamplesizes.Ourperformancematerialitywas75%
(2023:75%)ofoverallmateriality,amountingto£7,425,000(2023:£6,828,750)fortheGroup
financialstatementsand6,682,000(2023:6,145,000)fortheCompanyfinancialstatements.
Indeterminingtheperformancemateriality,weconsideredanumberoffactors–thehistory
ofmisstatements,riskassessmentandaggregationriskandtheeffectivenessofcontrols–
andconcludedthatanamountattheupperendofournormalrangewasappropriate.
WeagreedwiththeAuditCommitteethatwewouldreporttothemmisstatementsidentified
duringourauditabove£495,000(Groupaudit)(2023:£455,000)and445,000(Company
audit)(2023:£409,000)aswellasmisstatementsbelowthoseamountsthat,inourview,
warrantedreportingforqualitativereasons.
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group’s and the Company’s ability to
continue to adopt the going concern basis of accounting included:
• •
WereviewedtheDirectors’goingconcernpaperandmodelsupportingtheirgoing
concernassumption.Wediscussedwithmanagementtheassumptionsappliedinthe
goingconcernreviewsowecouldunderstandandchallengetherationaleforthose
assumptions,usingourknowledgeofthebusiness.Wetestedthemodel’smathematical
accuracy and considered the reasonableness of the revenue and cost assumptions made
and the available headroom throughout a period of at least 12 months from the date of
approvalofthefinancialstatements
• •
Wereviewedmanagement’ssensitivityscenariosincludingtheirseverebutplausible
downside.WeconsideredpotentialmitigatingactionsavailabletotheGroupthatare
achievableandwithinmanagement’scontrol.Wethenassessedtheavailabilityofliquid
resources under the different scenarios prepared by management and the associated
covenant tests applicable
• •
Wealsoassessedadditionaldownsidesensitivitiesandconsideredtheimpacton
covenantsandliquidityheadroom
• •
WereviewedtheGroup’spost-year-endperformance,includingtheJanuary2025CFO
report,andnotedthattheGroup’sperformanceinJanuary2025wasaheadofbudget.
Basedontheworkwehaveperformed,wehavenotidentifiedanymaterialuncertainties
relatingtoeventsorconditionsthat,individuallyorcollectively,maycastsignificantdoubt
on the Group’s and the Company’s ability to continue as a going concern for a period of at
least12monthsfromwhenthefinancialstatementsareauthorisedforissue.
Inauditingthefinancialstatements,wehaveconcludedthattheDirectors’useofthegoing
concernbasisofaccountinginthepreparationofthefinancialstatementsisappropriate.
However,becausenotallfutureeventsorconditionscanbepredicted,thisconclusionis
notaguaranteeastotheGroup’sandtheCompany’sabilitytocontinueasagoingconcern.
InrelationtotheDirectors’reportingonhowtheyhaveappliedtheUKCorporate
GovernanceCode,wehavenothingmaterialtoaddordrawattentiontoinrelationtothe
Directors’statementinthefinancialstatementsaboutwhethertheDirectorsconsideredit
appropriatetoadoptthegoingconcernbasisofaccounting.
OurresponsibilitiesandtheresponsibilitiesoftheDirectorswithrespecttogoingconcern
aredescribedintherelevantsectionsofthisreport.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the
financialstatementsandourauditors’reportthereon.TheDirectorsareresponsibleforthe
otherinformation.Ouropiniononthefinancialstatementsdoesnotcovertheother
informationand,accordingly,wedonotexpressanauditopinionor,excepttotheextent
otherwiseexplicitlystatedinthisreport,anyformofassurancethereon.
Inconnectionwithourauditofthefinancialstatements,ourresponsibilityistoreadthe
otherinformationand,indoingso,considerwhethertheotherinformationismaterially
inconsistentwiththefinancialstatementsorourknowledgeobtainedintheaudit,or
otherwiseappearstobemateriallymisstated.Ifweidentifyanapparentmaterial
inconsistencyormaterialmisstatement,wearerequiredtoperformproceduresto
concludewhetherthereisamaterialmisstatementofthefinancialstatementsora
materialmisstatementoftheotherinformation.If,basedontheworkwehaveperformed,
weconcludethatthereisamaterialmisstatementofthisotherinformation,wearerequired
toreportthatfact.Wehavenothingtoreportbasedontheseresponsibilities.
WithrespecttotheStrategicreportandDirectors’report,wealsoconsideredwhether
thedisclosuresrequiredbytheUKCompaniesAct2006havebeenincluded.
Basedonourworkundertakeninthecourseoftheaudit,theCompaniesAct2006
requiresusalsotoreportcertainopinionsandmattersasdescribedbelow.
Strategic report and Directors’ report
Inouropinion,basedontheworkundertakeninthecourseoftheaudit,theinformation
given in the Strategic report and Directors’ report for the year ended 31 December 2024
isconsistentwiththefinancialstatementsandhasbeenpreparedinaccordancewith
applicablelegalrequirements.
InlightoftheknowledgeandunderstandingoftheGroupandCompanyandtheir
environmentobtainedinthecourseoftheaudit,wedidnotidentifyanymaterial
misstatementsintheStrategicreportandDirectors’report.
Directors’ remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been
properlypreparedinaccordancewiththeCompaniesAct2006.
Synthomer plc Annual Report 2024125
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FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Independentauditors’reporttothemembersofSynthomerplccontinued
Corporate governance statement
TheListingRulesrequireustoreviewtheDirectors’statementsinrelationtogoingconcern,
longer-term viability and that part of the corporate governance statement relating to the
Company’scompliancewiththeprovisionsoftheUKCorporateGovernanceCodespecified
forourreview.Ouradditionalresponsibilitieswithrespecttothecorporategovernance
statement as other information are described in the Reporting on other information section
ofthisreport.
Basedontheworkundertakenaspartofouraudit,wehaveconcludedthateachofthe
followingelementsofthecorporategovernancestatement,includedwithintheGovernance
reportismateriallyconsistentwiththefinancialstatementsandourknowledgeobtained
duringtheaudit,andwehavenothingmaterialtoaddordrawattentiontoinrelationto:
• •
TheDirectors’confirmationthattheyhavecarriedoutarobustassessmentofthe
emerging and principal risks
• •
ThedisclosuresintheAnnualReportthatdescribethoseprincipalrisks,whatprocedures
areinplacetoidentifyemergingrisksandanexplanationofhowthesearebeing
managed or mitigated
• •
TheDirectors’statementinthefinancialstatementsaboutwhethertheyconsideredit
appropriate to adopt the going concern basis of accounting in preparing them, and their
identificationofanymaterialuncertaintiestotheGroup’sandCompany’sabilityto
continue to do so over a period of at least 12 months from the date of approval of the
financialstatements
• •
The Directors’ explanation as to their assessment of the Group’s and Company’s
prospects,theperiodthisassessmentcoversandwhytheperiodisappropriate
• •
TheDirectors’statementastowhethertheyhaveareasonableexpectationthatthe
Companywillbeabletocontinueinoperationandmeetitsliabilitiesastheyfalldueover
theperiodofitsassessment,includinganyrelateddisclosuresdrawingattentiontoany
necessaryqualificationsorassumptions.
OurreviewoftheDirectors’statementregardingthelonger-termviabilityoftheGroupand
Companywassubstantiallylessinscopethananauditandonlyconsistedofmaking
inquiriesandconsideringtheDirectors’processsupportingtheirstatement;checkingthat
thestatementisinalignmentwiththerelevantprovisionsoftheUKCorporateGovernance
Code;andconsideringwhetherthestatementisconsistentwiththefinancialstatements
andourknowledgeandunderstandingoftheGroupandCompanyandtheirenvironment
obtainedinthecourseoftheaudit.
Inaddition,basedontheworkundertakenaspartofouraudit,wehaveconcludedthateach
ofthefollowingelementsofthecorporategovernancestatementismateriallyconsistent
withthefinancialstatementsandourknowledgeobtainedduringtheaudit:
• •
TheDirectors’statementthattheyconsidertheAnnualReport,takenasawhole,isfair,
balanced and understandable, and provides the information necessary for the members
to assess the Group’s and Company’s position, performance, business model and strategy
• •
ThesectionoftheAnnualReportthatdescribesthereviewofeffectivenessofrisk
management and internal control systems
• •
ThesectionoftheAnnualReportdescribingtheworkoftheAuditCommittee.
WehavenothingtoreportinrespectofourresponsibilitytoreportwhentheDirectors’
statementrelatingtotheCompany’scompliancewiththeCodedoesnotproperlydisclosea
departurefromarelevantprovisionoftheCodespecifiedundertheListingRulesforreview
bytheauditors.
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities, the Directors are
responsibleforthepreparationofthefinancialstatementsinaccordancewiththe
applicableframeworkandforbeingsatisfiedthattheygiveatrueandfairview.The
Directors are also responsible for such internal control as they determine is necessary to
enablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,
whetherduetofraudorerror.
Inpreparingthefinancialstatements,theDirectorsareresponsibleforassessingthe
Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
theDirectorseitherintendtoliquidatetheGrouportheCompanyortoceaseoperations,or
havenorealisticalternativebuttodoso.
Auditors’ responsibilities for the audit of the financial statements
Ourobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatements
asawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissue
anauditors’reportthatincludesouropinion.Reasonableassuranceisahighlevelof
assurance,butisnotaguaranteethatanauditconductedinaccordancewithISAs(UK)
willalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefrom
fraud or error and are considered material if, individually or in the aggregate, they could
reasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasis
ofthesefinancialstatements.
Irregularities,includingfraud,areinstancesofnon-compliancewithlawsandregulations.
Wedesignproceduresinlinewithourresponsibilities,outlinedabove,todetectmaterial
misstatementsinrespectofirregularities,includingfraud.Theextenttowhichour
proceduresarecapableofdetectingirregularities,includingfraud,isdetailedbelow.
BasedonourunderstandingoftheGroupandindustry,weidentifiedthattheprincipal
risksofnon-compliancewithlawsandregulationsrelatedtobreachesofenvironmental,
healthandsafetyandcompetitionregulations,andweconsideredtheextenttowhich
non-compliancemighthaveamaterialeffectonthefinancialstatements.Wealso
consideredthoselawsandregulationsthathaveadirectimpactonthefinancial
statementssuchastheCompaniesAct2006,theListingRules,UKtaxlegislation
andequivalentlocallawsandlegislationsapplicabletomaterialcomponentteams.
Weevaluatedmanagement’sincentivesandopportunitiesforfraudulentmanipulation
ofthefinancialstatements(includingtheriskofoverrideofcontrols),anddetermined
thattheprincipalriskswererelatedtopostinginappropriatejournalentriestoincrease
revenueandprofitandmanagementbiasinsignificantaccountingestimates.TheGroup
engagementteamsharedthisriskassessmentwiththecomponentauditorssothat
theycouldincludeappropriateauditproceduresinresponsetosuchrisksintheirwork.
Synthomer plc Annual Report 2024126
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FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Independentauditors’reporttothemembersofSynthomerplccontinued
AuditproceduresperformedbytheGroupengagementteamand/orcomponent
auditorsincluded:
• •
Discussionswithmanagementandinternalauditaspartofourfraudriskassessment,
includingconsiderationofknownorsuspectedinstancesofnon-compliancewithlaws
andregulationsandfraud.ThisincludedreviewofBoardminutes,internalauditreports
andthereportfromthewhistleblowinghotline
• •
Evaluation of management’s controls designed to prevent and detect irregularities
• •
Challengingassumptionsandjudgementsmadebymanagementintheirsignificant
accountingestimates,inparticularinrelationtoimpairmentofgoodwill,goingconcern
andviabilityandthevaluationofdefinedbenefitschemeliabilities
• •
Obtainedalistofjournals,confirmeditscompleteness,anduseddataauditing
techniquestoidentifyjournalswhichweconsideredtobeatahigherriskoffraudsuchas
unusual account combinations like credits to revenue and debits to accounts other than
debtorsandintercompany,debitstonon-currentassets(exceptPPE)withcreditsto
expensesanddebitstoSpecialItemswherethecreditistoexpenses;wetestedthese
journalsbacktosupportingdocumentation
• •
Incorporated unpredictability into our audit procedures, this included performing a
reviewofsignificantcustomersintheGroup,reviewofimmaterialexceptionalitems
toensureappropriateclassification,andscanningofPPEadditionstoensure
appropriatecapitalisation.
Thereareinherentlimitationsintheauditproceduresdescribedabove.Wearelesslikelyto
becomeawareofinstancesofnon-compliancewithlawsandregulationsthatarenot
closelyrelatedtoeventsandtransactionsreflectedinthefinancialstatements.Also,therisk
of not detecting a material misstatement due to fraud is higher than the risk of not detecting
one resulting from error, as fraud may involve deliberate concealment by, for example,
forgeryorintentionalmisrepresentations,orthroughcollusion.
Our audit testing might include testing complete populations of certain transactions and
balances,possiblyusingdataauditingtechniques.However,ittypicallyinvolvesselectinga
limitednumberofitemsfortesting,ratherthantestingcompletepopulations.Wewilloften
seektotargetparticularitemsfortestingbasedontheirsizeorriskcharacteristics.Inother
cases,wewilluseauditsamplingtoenableustodrawaconclusionaboutthepopulation
fromwhichthesampleisselected.
Afurtherdescriptionofourresponsibilitiesfortheauditofthefinancialstatementsis
locatedontheFRC’swebsiteat:www.frc.org.uk/auditorsresponsibilities.Thisdescription
formspartofourauditors’report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s
membersasabodyinaccordancewithChapter3ofPart16oftheCompaniesAct2006and
fornootherpurpose.Wedonot,ingivingtheseopinions,acceptorassumeresponsibilityfor
anyotherpurposeortoanyotherpersontowhomthisreportisshownorintowhosehands
itmaycomesavewhereexpresslyagreedbyourpriorconsentinwriting.
Otherrequiredreporting
Companies Act 2006 exception reporting
UndertheCompaniesAct2006wearerequiredtoreporttoyouif,inouropinion:
• •
Wehavenotobtainedalltheinformationandexplanationswerequireforouraudit
• •
AdequateaccountingrecordshavenotbeenkeptbytheCompany,orreturnsadequate
for our audit have not been received from branches not visited by us
• •
CertaindisclosuresofDirectors’remunerationspecifiedbylawarenotmade
• •
TheCompanyfinancialstatementsandthepartoftheDirectors’remunerationreport
tobeauditedarenotinagreementwiththeaccountingrecordsandreturns.
Wehavenoexceptionstoreportarisingfromthisresponsibility.
Appointment
FollowingtherecommendationoftheAuditCommittee,wewereappointedbythemembers
on12July2012toauditthefinancialstatementsfortheyearended31December2012and
subsequentfinancialperiods.Theperiodoftotaluninterruptedengagementis13years,
coveringtheyearsended31December2012to31December2024.
Other matter
TheCompanyisrequiredbytheFinancialConductAuthorityDisclosureGuidanceand
TransparencyRulestoincludethesefinancialstatementsinanannualfinancialreport
preparedunderthestructureddigitalformatrequiredbyDTR4.1.15R-4.1.18Randfiledon
theNationalStorageMechanismoftheFinancialConductAuthority.Thisauditors’report
providesnoassuranceoverwhetherthestructureddigitalformatannualfinancialreport
hasbeenpreparedinaccordancewiththoserequirements.
forandonbehalfofPricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Watford
11 March 2025
Synthomer plc Annual Report 2024127
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FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements
2024 | 2023 | ||||||
| Underlying | Special | Underlying | Special | ||||
| performance | Items | IFRS | performance | Items | IFRS | ||
| Note | £m | £m | £m | £m | £m | £m | |
| Continuing operations | |||||||
Revenue | 5 | ||||||
Company and subsidiaries operating profit before Special Items | |||||||
Amortisation of acquired intangibles | 4 | ( | ( | ( | ( | ||
Restructuring and site closure costs | 4 | ( | ( | ( | ( | ||
Acquisition costs and related gains | 4 | ( | ( | ( | ( | ||
Sale of business | 4 | ( | ( | ( | ( | ||
Regulatory fine | 4 | ( | ( | ||||
Abortive bond costs | 4 | ( | ( | ||||
Impairment charge | 4 | ( | ( | ( | ( | ||
Pension past service cost | 4 | ( | ( | ||||
Company and subsidiaries operating profit/(loss) | ( | ( | ( | ( | |||
Share of joint ventures | 18 | ( | |||||
Operating profit/(loss) | 6 | ( | ( | ( | ( | ||
Interest payable | 9 | ( | ( | ( | ( | ||
Interest receivable | 9 | ||||||
Fair value loss on unhedged interest derivatives | 4 | ( | ( | ||||
Loss on extinguishment of financing facilities | 4 | ( | ( | ( | ( | ||
Net interest expense on defined benefit obligations | 9 | ( | ( | ( | ( | ||
Interest element of lease payments | 9 | ( | ( | ( | ( | ||
Finance costs | ( | ( | ( | ( | ( | ( | |
Loss before taxation | ( | ( | ( | ( | ( | ( | |
Taxation | 10 | ||||||
Loss for the year from continuing operations | ( | ( | ( | ( | ( | ( | |
Profit/(loss) for the year from discontinuing operations attributable to equity holders of the parent | 30 | ( | ( | ( | |||
Loss for the year | ( | ( | ( | ( | ( | ( | |
Profit/(loss) attributable to non-controlling interests | ( | ||||||
Loss attributable to equity holders of the parent | ( | ( | ( | ( | ( | ( | |
( | ( | ( | ( | ( | ( | ||
| Earnings per share | |||||||
– Basic from continuing operations | 13 | ( | ( | ( | ( | ( | ( |
– Diluted from continuing operations | 13 | ( | ( | ( | ( | ( | ( |
– Basic | 13 | ( | ( | ( | ( | ( | ( |
– Diluted | 13 | ( | ( | ( | ( | ( | ( |
Consolidated income statement
for the year ended 31 December 2024
Synthomer plc Annual Report 2024128
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FINANCIAL STATEMENTS
OTHER INFORMATION
| Groupfinancialstatements | |||||||
2024 | 2023 | ||||||
| Equity holders | Non-controlling | Equity holders | Non-controlling | ||||
| of the parent | interests | Total | of the parent | interests | Total | ||
| Note | £m | £m | £m | £m | £m | £m | |
(Loss)/profit for the year | ( | ( | ( | ( | |||
Actuarial (losses)/gains | 26 | ( | ( | ||||
Tax relating to components of other comprehensive income | 10 | ( | ( | ||||
Total items that will not be reclassified to profit or loss | ( | ( | |||||
Exchange differences on translation of foreign operations | ( | ( | ( | ( | |||
Exchange differences recycled on sale of business | ( | ( | |||||
Fair value loss on hedged interest derivatives | ( | ( | ( | ( | |||
Gains on net investment hedges taken to equity | |||||||
Total items that may be reclassified subsequently to profit or loss | ( | ( | ( | ( | |||
Other comprehensive income/(expense) for the year | ( | ( | ( | ( | |||
Total comprehensive (expense)/income for the year | ( | ( | ( | ( | ( |
Consolidated statement of comprehensive income
for the year ended 31 December 2024
Synthomer plc Annual Report 2024129
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FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements
Note
| Capital | Hedging & | Total equity | Non- | |||||
| Share | Share | redemption | translation | Retained | holdings of | controlling | Total | |
| capital | premium | reserve | reserve | earnings | the parent | interests | equity | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
At | ||||||||
(Loss)/profit for the year | ( | ( | ( | |||||
Other comprehensive income/(expense) for the year | ( | ( | ||||||
Total comprehensive income/(expense) for the year | ( | ( | ( | |||||
Dividends | ( | ( | ||||||
Share-based payments | ||||||||
At |
Note
| Capital | Hedging & | Total equity | Non- | ||||||
| Share | Share | redemption | translation | Retained | holdings of | controlling | Total | ||
| capital | premium | reserve | reserve | earnings | the parent | interests | equity | ||
| £m | £m | £m | £m | £m | £m | £m | £m | ||
At 1 January 2023 | |||||||||
(Loss)/profit for the year | ( | ( | ( | ||||||
Other comprehensive (expense)/income for the year | ( | ( | ( | ( | |||||
Total comprehensive expense for the year | ( | ( | ( | ( | ( | ||||
Dividends | 12 | ||||||||
Share consolidation | ( | ||||||||
Issue of shares | |||||||||
Share-based payments | |||||||||
At 31 December 2023 |
Consolidatedstatementofchangesinequity
for the year ended 31 December 2024
Synthomer plc Annual Report 2024130
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FINANCIAL STATEMENTS
OTHER INFORMATION
| Groupfinancialstatements | |||
| 2024 | 2023 | ||
| Note | |||
| Non-current assets | |||
Goodwill | 14 | ||
Acquired intangible assets | 15 | ||
Other intangible assets | 16 | ||
Property, plant and equipment | 17 | ||
Deferred tax assets | 11 | ||
Defined benefit asset | 26 | ||
Investment in joint ventures | 18 | ||
Total non-current assets | |||
| Current assets | |||
Inventories | 19 | ||
Trade and other receivables | 20 | ||
Current tax assets | 10 | ||
Cash and cash equivalents | 21 | ||
Derivative financial instruments | 22 | ||
Assets classified as held for sale | 30 | ||
Total current assets | |||
Total assets | |||
| Current liabilities | |||
Borrowings | 21 | ( | ( |
Trade and other payables | 24 | ( | ( |
Lease liabilities | 23 | ( | ( |
Current tax liabilities | 10 | ( | ( |
Provisions for other liabilities and charges | 25 | ( | ( |
Derivative financial instruments | 22 | ( | ( |
Liabilities classified as held for sale | 30 | – | – |
Total current liabilities | ( | ( |
Consolidatedbalancesheet
as at 31 December 2024
Synthomer plc Annual Report 2024131
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FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements
Consolidated balancesheet continued
Note
| 2024 | 2023 | ||
| £m | £m | ||
| Non-current liabilities | |||
Borrowings | 21 | ( | ( |
Trade and other payables | 24 | ( | ( |
Lease liabilities | 23 | ( | ( |
Deferred tax liabilities | 11 | ( | ( |
Retirement benefit obligations | 26 | ( | ( |
Provisions for other liabilities and charges | 25 | ( | ( |
Total non-current liabilities | ( | ( | |
Total liabilities | ( | ( | |
Net assets | |||
| Equity | |||
Share capital | 27 | ||
Share premium | 27 | ||
Capital redemption reserve | |||
Hedging and translation reserve | 27 | ||
Retained earnings | 27 | ||
Equity attributable to equity holders of the parent | |||
Non-controlling interests | |||
Total equity |
Synthomer plc Annual Report 2024132
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FINANCIAL STATEMENTS
OTHER INFORMATION
| Groupfinancialstatements | |||||
2024 | 2023 | ||||
Note | £m | £m | |||
| Operating | |||||
Cash generated from operations | 28 | ||||
– Interest received | |||||
– Interest paid | ( | ( | |||
– Interest element of lease payments | ( | ( | |||
Net interest paid | ( | ( | |||
– UK corporation tax received/(paid) | ( | ||||
– Overseas corporate tax (paid)/received | ( | ||||
Total tax (paid)/received | ( | ||||
Net cash (outflow)/inflow from operating activities | ( | ||||
| Investing | |||||
Dividends received from joint ventures | 18 | ||||
Purchase of property, plant and equipment and intangible assets | 16, 17 | ( | ( | ||
Proceeds from sale of property, plant and equipment | |||||
Purchase of business | ( | ||||
Proceeds from sale of business | |||||
Net cash (outflow)/inflow from investing activities | ( | ||||
| Financing | |||||
Dividends paid | – | – | |||
Dividends paid to non-controlling interests | ( | ||||
Proceeds on issue of shares | 27 | ( | |||
Settlement of equity-settled share-based payments | ( | ( | |||
Repayment of principal portion of lease liabilities | ( | ( | |||
Repayment of borrowings | ( | ( | |||
Proceeds of borrowings | |||||
Net cash outflow from financing activities | ( | ( | |||
(Decrease)/increase in cash, cash equivalents and bank overdrafts during the period | ( | ||||
Cash and cash equivalents and bank overdrafts at 1 January | 21 | ||||
Foreign exchange | 21 | ( | ( | ||
Cash, cash equivalents and bank overdrafts at 31 December | 21 |
See note 30 for further details of cash flows from discontinued operations.
Consolidatedcashflowstatement
for the year ended 31 December 2024
Synthomer plc Annual Report 2024133
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FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements
Note
| 2024 | 2023 | ||
| £m | £m | ||
Net cash (outflow)/inflow from operating activities | ( | ||
Add: dividends received from joint ventures | 18 | ||
Less: net capital expenditure | ( | ( | |
Less: purchase of businesses | ( | ||
Add: net proceeds from sale of business | |||
( | |||
Ordinary dividends paid | 12 | ||
Issue of shares | 27 | ( | |
Dividends paid to non-controlling interests | ( | ||
Settlement of equity-settled share-based payments | ( | ( | |
Repayment for principal portion of lease liabilities | ( | ( | |
Foreign exchange and other movements | 21 | ||
(Increase)/decrease in net debt | ( |
Reconciliationofnetcashflowfromoperatingactivitiestomovementinnetdebt
for the year ended 31 December 2024
Synthomer plc Annual Report 2024134
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FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements
1 General information
incorporated and domiciled in the United Kingdom
the Companies Act. The address of the registered office is given on page 118. The
Company is listed on the London Stock Exchange.
The principal activities of the Company and its subsidiaries (the ‘Group’) and the
nature of the Group’s operations are set out in the Strategic report.
2 Material accounting policies
Notestotheconsolidatedfinancialstatements
for the year ended 31 December 2024
Synthomer plc Annual Report 2024135
STRATEGIC REPORT GOVERNANCE REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
2 Material accounting policies continued
Synthomer plc Annual Report 2024136
STRATEGIC REPORT GOVERNANCE REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
Synthomer plc Annual Report 2024137
STRATEGIC REPORT GOVERNANCE REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
2 Material accounting policies continued
Synthomer plc Annual Report 2024138
STRATEGIC REPORT GOVERNANCE REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
Synthomer plc Annual Report 2024139
STRATEGIC REPORT GOVERNANCE REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
2 Material accounting policies continued
Synthomer plc Annual Report 2024140
STRATEGIC REPORT GOVERNANCE REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
Synthomer plc Annual Report 2024141
STRATEGIC REPORT GOVERNANCE REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
2 Material accounting policies continued
• •
3 Adoption of new and revised standards
4 Special Items
IFRS and Underlying performance
The IFRS profit measures show the performance of the Group as a whole and as such
include all sources of income and expense, including both one-off items and those that
do not relate to the Group’s ongoing businesses. To provide additional clarity on the
ongoing trading performance of the Group’s businesses, management uses ‘Underlying’
performance as an APM to plan for, control and assess the performance of the segments.
Underlying performance differs from the IFRS measures as it excludes Special Items.
Special Items
Special Items are disclosed separately in order to provide a clearer indication of the
Group’s Underlying performance.
Special Items are either irregular, and therefore including them in the assessment
of a segment’s performance would lead to a distortion of trends, or are technical
adjustments which ensure the Group’s financial statements are in compliance with
IFRS but do not reflect the operating performance of a segment in the year, or both.
An example of the latter is the amortisation of acquired intangibles, which principally
relates to acquired customer relationships. The Group incurs costs, which are recognised
as an expense in the income statement, in maintaining these customer relationships.
The Group considers that the exclusion of the amortisation charge on acquired
intangibles from Underlying performance avoids the potential double counting of such
costs and therefore excludes it as a Special Item from Underlying performance.
The following are consistently disclosed separately as Special Items in order to provide
a clearer indication of the Group’s Underlying performance:
• •
Restructuring and site closure costs
• •
Sale of business or significant asset
• •
Acquisition costs
• •
Amortisation of acquired intangible assets
• •
Impairment of non-current assets
• •
Fair value adjustments in respect of derivative financial instruments where hedge
accounting is not applied
• •
Items of income and expense that are considered material, either by their size and/
or nature
• •
Customisation, configuration and set up costs of significant Software as a Service
(“SaaS”) arrangements
• •
Tax impact of above items
• •
Settlement of prior period tax issues.
Synthomer plc Annual Report 2024142
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FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
Special Items comprise:
| 2024 | 2023 | ||
| Note | £m | £m | |
Amortisation of acquired intangibles | 15 | (45.1) | (49.3) |
| Restructuring and site closure | |||
costs (including share of JV) | (15.4) | (14.7) | |
Impairment charge | (5.7) | (5.6) | |
Acquisition costs and related gains | (0.6) | (2.0) | |
Sale of business | (3.3) | (0.1) | |
Regulatory fine | – | (0.7) | |
Abortive bond costs | – | (0.5) | |
Pension past service cost | (4.4) | – | |
Total impact on operating profit/loss | (74.5) | (72.9) | |
| Finance costs | |||
Fair value loss on unhedged interest derivatives | 9 | – | (1.8) |
Loss on extinguishment of financing facilities | 9 | (1.4) | (4.7) |
Total impact on loss before taxation | (75.9) | (79.4) | |
Taxation Special Items | 10 | 7.5 | (1.7) |
Taxation on Special Items | 10 | 7.1 | 4.5 |
| Total impact on loss for the year – | |||
continuing operations | (61.3) | (76.6) | |
| Discontinued operations | |||
Restructuring and site closure costs | (1.1) | (3.7) | |
Sale of business | (3.1) | 61.3 | |
Impairment charge | – | (0.8) | |
Taxation on Special Items | – | (17.4) | |
| Total impact on profit/loss for the year – | |||
discontinued operations | (4.2) | 39.4 | |
Total impact on loss for the year | (65.5) | (37.2) |
Amortisation of acquired intangibles is the amortisation on the customer lists, patents,
trademarks and trade secrets arising on past acquisitions. The fair value of the
intangible assets arising on past acquisitions are being amortised over periods of 8-20
years mainly dependent on the characteristics of the customer relationships.
Within continuing operations, restructuring and site closure costs in 2024
principally comprised:
• •
A £5.5m charge in relation to the ongoing integration of the acquired Adhesive
Resins business into the Adhesive Solutions division
• •
£3.7m of costs in relation to restructuring costs associated with our operational
site reviews to align with our strategic initiatives
• •
£7.3m of costs for ongoing functional and site rationalisation in the USA and
Europe, as a result of previous divestments and closures
• •
A £2.4m gain in relation to site rationalisation activity and a release of an uncertain
tax provision in Malaysia.
Within discontinued operations, Restructuring and site closure costs of £1.1m were
incurred in relation to the closure of the US paper and carpets business.
Restructuring and site closure costs in 2023 included charges to integrate the
adhesive resins business, site rationalisation costs in the USA, Malaysia and Europe,
and costs in relation to the strategy change and alignment of the business into its
new divisions.
Within continuing operations, a further £3.6m impairment charge was provided in
relation to plant capacity plan changes in Malaysia and a £2.1m impairment
recognised in relation to site rationalisations in the USA. The impairment charge in
2023 related to the mothballing of the NBR plant in Malaysia. The discontinued
operations impairment charge in 2023 related to lease impairments in the
discontinued US paper and carpets business.
Acquisition costs and related gains are for the acquisition of the adhesive resins
business and comprise £0.6m of costs, related to obligations to the US pension
schemes . Acquisition costs in 2023 also related to this acquisition.
Sale of business mainly related to the proceeds net of any costs, primarily professional
fees, incurred in conjunction with the sale of the compounding business to Matco
Latex Services BV along with costs incurred in relation to prior and future divestments.
Other costs include a £4.4m charge in relation to a one-off non-cash past service cost
due to a “Barber window” equalisation and other adjustments which arose following a
legal review of scheme documentation.
In July 2018, the Group entered into swap arrangements to fix euro interest rates on
the full value of the then €440m committed unsecured revolving credit facility. The fair
value movement of the unhedged interest rate derivatives in 2023 relates to the
movement in the mark-to-market of the swap in excess of the Group’s borrowings.
Taxation Special Items in 2024 reflected the release of a Malaysian uncertain tax
provision which was successfully concluded in the year. Tax Special Items in 2023
related to the disposal of the Laminates, Films and Coated Fabrics business.
Taxation on Special Items is mainly deferred tax credits arising on the amortisation of
acquired intangibles and restructuring and site closure costs.
Synthomer plc Annual Report 2024143
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FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
5 Segmental analysis
The Group’s Executive Committee, chaired by the Chief Executive Officer, examines
the Group’s performance. At the start of 2024, certain foam products were transferred
from the CCS division into Performance Materials, and tyre cord, elastomeric modifiers
and reinforcing resins products transferred in the other direction. Other than the
reclassification of goodwill detailed in note 14, the net financial effect was not significant.
The Group’s reportable segments are as follows:
Coatings & Construction Solutions
Our specialist polymers enhance the sustainable performance of a wide range of
coatings and construction products. We work across architectural and masonry
coatings, mortar modification, waterproofing and flooring, fibre bonding, and
energy solutions.
Adhesive Solutions
Our adhesive solutions bond, modify and compatibilise surfaces and components
for products including tapes and labels, packaging, hygiene, tyres and plastic
modification, helping improve permeability, strength, elasticity, damping, dispersion
and grip.
Health & Protection and Performance Materials
We help enhance protection and performance in a wide range of industries including
medical glove manufacture, speciality paper, food packaging, carpet and artificial turf,
gel foam elastomers, and vinyl-coated seating fabrics.
The Group’s Executive Committee is the chief operating decision maker and primarily
uses a measure of EBITDA to assess the performance of the operating segments.
No information is provided to the Group’s Executive Committee at the segment
level concerning interest income, interest expense, income tax or other material
non-cash items.
No single customer accounts for more than 10% of the Group’s revenue.
Synthomer plc Annual Report 2024144
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FINANCIAL STATEMENTS
OTHER INFORMATION
Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
5 Segmental analysis continued
A segmental analysis of Underlying performance and Special Items is shown below.
| Discontinued | |||||||
| Continuing operations | operations | ||||||
| Health & | Health & | ||||||
| Protection | Protection | ||||||
| Coatings & | and | and | |||||
| Construction | Adhesive | Performance | Performance | ||||
| Solutions | Solutions | Materials | Corporate | Total | Materials | Total | |
| 2024 | £m | £m | £m | £m | £m | £m | £m |
| Revenue | |||||||
Total revenue | 790.5 | 588.4 | 611.4 | – | 1,990.3 | 9.8 | 2,000.1 |
Inter-segmental revenue | – | – | (3.5) | – | (3.5) | – | (3.5) |
790.5 | 588.4 | 607.9 | – | 1,986.8 | 9.8 | 1,996.6 | |
EBITDA | 85.9 | 47.9 | 36.5 | (23.7) | 146.6 | 2.6 | 149.2 |
Depreciation and amortisation | (25.3) | (32.9) | (28.1) | (9.9) | (96.2) | (0.2) | (96.4) |
Operating profit/(loss) before Special Items | 60.6 | 15.0 | 8.4 | (33.6) | 50.4 | 2.4 | 52.8 |
Special Items | (28.1) | (24.5) | (17.9) | (4.0) | (74.5) | (4.2) | (78.7) |
Operating profit/(loss) | 32.5 | (9.5) | (9.5) | (37.6) | (24.1) | (1.8) | (25.9) |
Finance costs | (61.4) | ||||||
Loss before taxation | (87.3) | ||||||
| Discontinued | |||||||
| Continuing operations | operations | ||||||
| Health & | Health & | ||||||
| Protection | Protection | ||||||
| Coatings & | and | and | |||||
| Construction | Adhesive | Performance | Performance | ||||
| Solutions | Solutions | Materials | Corporate | Total | Materials | Total | |
| 2023 | £m | £m | £m | £m | £m | £m | £m |
| Revenue | |||||||
Total revenue | 820.2 | 581.7 | 549.3 | – | 1,951.2 | 80.6 | 2,031.8 |
Inter-segmental revenue | – | – | (10.6) | – | (10.6) | – | (10.6) |
820.2 | 581.7 | 538.7 | – | 1,940.6 | 80.6 | 2,021.2 | |
EBITDA | 100.1 | 31.2 | 26.3 | (20.2) | 137.4 | 1.7 | 139.1 |
Depreciation and amortisation | (25.8) | (38.7) | (32.3) | ( 7.2) | (104.0) | (1.3) | (105.3) |
Operating profit/(loss) before Special Items | 74.3 | (7.5) | (6.0) | (27.4) | 33.4 | 0.4 | 33.8 |
Special Items | (32.2) | (25.2) | (9.3) | (6.2) | (72.9) | 56.8 | (16.1) |
Operating profit/(loss) | 42.1 | (32.7) | (15.3) | (33.6) | (39.5) | 57.2 | 17.7 |
Finance costs | (71.4) | ||||||
Loss before taxation | (53.7) | ||||||
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5 Segmental analysis continued
Revenue by destination | Non-current assets | |||
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
UK | 97.7 | 97.1 | 180.0 | 191.6 |
Germany | 227.0 | 259.9 | 170.9 | 174.7 |
Italy | 88.9 | 94 | 32.2 | 34.6 |
Netherlands | 78.8 | 68.5 | 129.6 | 140.7 |
France | 83.8 | 98.8 | 85.4 | 73.0 |
Belgium | 46.1 | 49.8 | 51.9 | 57.9 |
Spain | 76.9 | 7 7.6 | 5.9 | 6.0 |
Other Europe | 258.1 | 261.1 | 69.0 | 90.4 |
Malaysia | 177.6 | 117.6 | 143.5 | 154.5 |
China | 116.2 | 110.7 | 25.7 | 23.7 |
Other Asia | 152.9 | 122.4 | 4.1 | 4.2 |
USA | 469.3 | 511.2 | 721.9 | 742.5 |
Rest of World | 123.3 | 152.5 | 9.3 | 8.7 |
1,996.6 | 2,021.2 | 1,629.4 | 1,702.5 |
| 2024 | 2023 | ||
| Note | £m | £m | |
Revenue | 1,986.8 | 1,940.6 | |
Cost of sales | (1,649.1) | (1,640.5) | |
Gross profit | 337.7 | 300.1 | |
Sales and marketing costs | (77.5) | (73.6) | |
Administrative expenses | (115.2) | (90.5) | |
Share of joint ventures | 18 | 1.6 | 1.4 |
EBITDA | 146.6 | 137.4 | |
| Depreciation and amortisation – Underlying | |||
performance | (96.2) | (104.0) | |
Operating profit – Underlying performance | 50.4 | 33.4 | |
Special Items | (74.5) | (72.9) | |
Operating loss – IFRS | (24.1) | (39.5) |
| 2024 | 2023 | ||
| Note | £m | £m | |
| Operating profit is stated after charging the following: | |||
Amortisation of acquired intangibles | 4 | 45.1 | 49.3 |
Amortisation of other intangibles | 5 | 12.1 | 8.8 |
Depreciation of property, plant and equipment | 5 | 73.0 | 83.7 |
Depreciation of right of use assets | 5 | 11.1 | 11.5 |
Research and development expenditure | 32.7 | 33.8 | |
Net loss on foreign exchange | 0.4 | 2.0 |
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Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
| 2024 | 2023 | |
| £’000 | £’000 | |
| Fees payable to the Company’s auditor for: | ||
| – Audit of the Company’s annual financial statements | ||
and the consolidated annual financial statements | 527 | 637 |
Fees payable to the Company’s auditor and their associates for other services to the Group: | ||
| – Audit of the Company’s subsidiaries’ annual | ||
financial statements | 1,911 | 1,893 |
Total audit fees | 2,438 | 2,530 |
Audit related assurance services | 53 | 51 |
Other assurance services | 196 | 542 |
Total non-audit fees | 249 | 593 |
8 Staff costs
| 2024 | 2023 | |
| Number | Number | |
| The average monthly number of employees | ||
| during the year by segment was: | ||
Coatings & Construction Solutions | 2,117 | 2,152 |
Adhesive Solutions | 718 | 723 |
Health & Protection and Performance Materials | 1,243 | 1,816 |
Corporate | 49 | 47 |
4,127 | 4,738 |
| 2024 | 2023 | |
| £m | £m | |
| The aggregate remuneration of all Group | ||
| employees comprised: | ||
Wages and salaries | 251.5 | 245.2 |
Social security costs | 34.7 | 35.2 |
Other pension costs | 18.3 | 15.8 |
Share-based payments | 1.6 | 1.8 |
306.1 | 298.0 |
Directors’ emoluments are disclosed in the Directors’ remuneration report on pages
101 to 116.
| 2024 | 2023 | |
| £m | £m | |
Interest payable on bank loans and overdrafts | 68.0 | 70.6 |
Less: interest receivable | (12.1) | (10.2) |
Net interest expense on defined benefit obligations | 1.7 | 2.7 |
Interest element of lease payments | 2.4 | 1.8 |
Underlying finance costs | 60.0 | 64.9 |
Fair value loss on unhedged interest derivatives | – | 1.8 |
Loss on extinguishment of financing facilities | 1.4 | 4.7 |
Total finance costs from continuing operations | 61.4 | 71.4 |
Finance costs from discontinued operations | – | – |
Total finance costs | 61.4 | 71.4 |
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10 Taxation
| 2024 | 2023 | |
| £m | £m | |
| Current tax | ||
UK corporation tax | (0.5) | (0.1) |
Overseas taxation | 15.1 | 11.8 |
14.6 | 11.7 | |
| Deferred tax | ||
Origination and reversal of temporary differences | (18.0) | (13.2) |
(3.4) | (1.5) | |
| Special Items | ||
| Current tax: | ||
Historical issues | ( 7.5) | 1.7 |
Purchase and sale of business | (0.1) | 0.1 |
Restructuring and site closure costs | (1.5) | (1.9) |
| Deferred tax: | ||
Sale of business | (0.1) | 17.0 |
Restructuring and site closure costs | (0.6) | 0.6 |
Amortisation of acquired intangibles | (3.7) | (2.9) |
Impairment of goodwill | – | – |
Acquired tax attributes | – | – |
Prior year adjustment | (1.1) | – |
(14.6) | 14.6 | |
Total tax on loss before taxation | (18.0) | 13.1 |
Total tax from continuing operations | (18.8) | (6.3) |
Total tax from discontinued operations | 0.8 | 19.4 |
UK corporation tax is calculated at 25% (2023: 23.5%) of the estimated assessable
profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing
in the respective jurisdictions.
Reconciliation of tax expense to profit before taxation
The differences between the total tax expense shown above and the amount
calculated by applying the standard rate of UK corporation tax to the profit before
tax is as follows.
| 2024 | 2023 | |
| £m | £m | |
Loss before taxation | (87.3) | (53.7) |
| Tax on loss before taxation at standard UK corporation | ||
tax rate of 25% (2023: 23.5%) | (21.8) | (12.6) |
| Effects of: | ||
Expenses not deductible for tax purposes | 10.6 | 7.0 |
Tax incentives and items not subject to tax | (2.3) | (4.3) |
Higher tax rates on overseas earnings | (1.4) | (0.5) |
| Other deferred tax assets not recognised less amounts | ||
now recognised | 2.0 | 1.8 |
Adjustments to tax charge in respect of prior periods | (4.6) | (0.2) |
Effect of change of rate on deferred tax | 0.3 | (0.9) |
Sale of business | (0.8) | 22.8 |
Tax (credit)/charge for year | (18.0) | 13.1 |
Tax relating to components of other comprehensive income
| 2024 | 2023 | |
| £m | £m | |
Current tax credit in respect of actuarial losses | (0.2) | – |
| Deferred tax charge/(credit) in respect of actuarial | ||
movements | 0.3 | (1.0) |
Total tax charge in respect of actuarial gains/losses | 0.1 | (1.0) |
Current tax
| 2024 | 2023 | |
| £m | £m | |
Current tax assets | 15.6 | 8.8 |
Current tax liabilities | (17.6) | (28.0) |
The Group’s effective tax rate is affected by the tax impact of Special Items.
It is therefore helpful to consider the Underlying and Special Items affecting tax
rates separately:
The effective tax rate on continuing underlying profit before tax for the year is
43.8% (2023: 11.1%) due to the geographical mix of profits.
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Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
10 Taxation continued
The effective tax rate for Special Items was 19% (2023: -65%), this was largely driven by the current tax credit in relation to the successful resolution
of the litigation in Malaysia regarding the tax treatment on the sale of plantation land. In 2023, this was driven by the utilisation of US tax losses against
the US tax on the sale of the Laminates, Films and Coated Fabrics business.
Global Minimum Top-up Tax
The Group is subject to global minimum top-up tax under Pillar Two legislation for the financial year beginning 1 January 2024. The Group has
performed an assessment of the Group’s potential exposure to Pillar Two top-up tax and, based on the assessment performed, transitional safe
harbour relief should apply to all the jurisdictions where the Group operates. Therefore, the Group does not expect a potential exposure to the Pillar Two
top-up tax. The management is not currently aware of any circumstances under which this might change.
The Group has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax.
| Accelerated | Acquired | Right of | |||
| tax depreciation | intangibles | Sub-total | offset | Total | |
| 2024 | £m | £m | £m | £m | £m |
At 1 January | (40.9) | (32.8) | (73.7) | 39.9 | (33.8) |
Reclassification to assets/liabilities classified as held for sale | – | – | – | ||
Credited to income statement | 2.7 | 3.7 | 6.4 | ||
Exchange adjustment | (0.8) | 1.0 | 0.2 | ||
At 31 December | (39.0) | (28.1) | (67.1) | 38.2 | (28.9) |
2023 | £m | £m | £m | £m | £m |
At 1 January | (56.2) | (37.8) | (94.0) | 49.1 | (44.9) |
Reclassification to assets/liabilities classified as held for sale | (0.1) | – | (0.1) | ||
Credited to income statement | 10.6 | 2.9 | 13.5 | ||
Exchange adjustment | 4.8 | 2.1 | 6.9 | ||
At 31 December | (40.9) | (32.8) | (73.7) | 39.9 | (33.8) |
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11 Deferred taxation continued
| Provisions & | |||||||
| Losses | Pension | restructuring | Other | Sub-total | Right of offset | Total | |
| 2024 | £m | £m | £m | £m | £m | £m | £m |
At 1 January | 37.1 | 5.4 | 26.1 | 8.2 | 76.8 | (39.9) | 36.8 |
Reclassification to assets/liabilities classified as held for sale | – | – | – | – | – | ||
Credited/(charged) to income statement | 3.1 | (2.9) | 1.3 | 15.6 | 17.1 | ||
Charged to statement of other comprehensive income | 0.3 | 0.3 | |||||
Exchange adjustment | (0.2) | (0.4) | 0.3 | (0.3) | |||
At 31 December | 40.0 | 2.4 | 27.4 | 24.1 | 93.9 | (38.2) | 55.7 |
2023 | £m | £m | £m | £m | £m | £m | £m |
At 1 January | 62.6 | 8.0 | 22.9 | 5.9 | 99.4 | (49.1) | 50.3 |
Reclassification to assets/liabilities classified as held for sale | – | – | – | – | – | ||
Credited/(charged) to income statement | (23.0) | (1.2) | 6.9 | 2.3 | (15.0) | ||
Charged to statement of other comprehensive income | – | (1.0) | – | – | (1.0) | ||
Exchange adjustment | (2.5) | (0.4) | (3.7) | – | (6.6) | ||
At 31 December | 37.1 | 5.4 | 26.1 | 8.2 | 76.8 | (39.9) | 36.8 |
| 2024 | 2023 | |
| £m | £m | |
Tax losses | 86.7 | 89.0 |
86.7 | 89.0 |
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Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
12 Dividends
In 2022, the Board announced the suspension of dividends. The Board has confirmed that dividends will remain suspended until the Group’s net debt is less than 3.0x its EBITDA.
13 Earnings per share
2024 | 2023 | ||||||
| Underlying | Special | Underlying | Special | ||||
| performance | Items | IFRS | performance | Items | IFRS | ||
| Earnings | |||||||
Loss attributable to equity holders of the parent – continuing operations | £m | (5.7) | (64.3) | (70.0) | (28.4) | (76.4) | (104.8) |
Loss attributable to equity holders of the parent | £m | (4.1) | (68.5) | (72.6) | (30.0) | (37.0) | (67.0) |
| Number of shares | |||||||
Weighted average number of ordinary shares – basic | ’000 | 163,473 | 85,382 | ||||
Effect of dilutive potential ordinary shares | ’000 | 1,078 | 251 | ||||
Weighted average number of ordinary shares – diluted | ’000 | 164,551 | 85,633 | ||||
| Earnings per share for profit from continuing operations | |||||||
Basic earnings per share | pence | (3.5) | (39.3) | (42.8) | (33.4) | (89.4) | (122.8) |
Diluted earnings per share | pence | (3.5) | (39.3) | (42.8) | (33.4) | (89.4) | (122.8) |
| Earnings per share for profit from discontinued operations | |||||||
Basic earnings per share | pence | 1.0 | (2.6) | (1.6) | (1.9) | 46.2 | 44.3 |
Diluted earnings per share | pence | 1.0 | (2.6) | (1.6) | (1.9) | 46.2 | 44.3 |
| Earnings per share for profit attributable to equity holders of the parent | |||||||
Basic earnings per share | pence | (2.5) | (41.9) | (44.4) | (35.1) | (43.4) | (78.5) |
Diluted earnings per share | pence | (2.5) | (41.9) | (44.4) | (35.1) | (43.4) | (78.5) |
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| 2024 | 2023 | |
| £m | £m | |
| Cost | ||
At 1 January | 608.4 | 629.9 |
Measurement period adjustment | – | 1.3 |
Sale of business | (7.5) | – |
Exchange adjustments | (2.1) | (22.8) |
At 31 December | 598.8 | 608.4 |
| Accumulated impairment losses | ||
At 1 January | 142.7 | 149.1 |
Exchange adjustments | 1.0 | (6.4) |
At 31 December | 143.7 | 142.7 |
| Net book value | ||
At 31 December | 455.1 | 465.7 |
| Net book | Net book | ||||
| value at | value at | ||||
| 1 January | Divisional | Exchange | 31 December | ||
| 2024 | reorganisation | Derecognition | adjustments | 2024 | |
| £m | £m | £m | £m | £m | |
| Coatings & | |||||
| Construction | |||||
Solutions | 320.5 | 36.3 | – | (2.3) | 354.5 |
Adhesive Solutions | 24.5 | – | – | 0.2 | 24.7 |
| Health & Protection | |||||
| and Performance | |||||
Materials | 120.7 | (36.3) | (7.5) | (1.0) | 75.9 |
Total | 465.7 | 0.0 | (7.5) | (3.1) | 455.1 |
| Net book | Net book | ||||
| value at | Measurment | value at | |||
| 1 January | period | Exchange | 31 December | ||
| 2023 | adjustment | Derecogniton | adjustments | 2023 | |
| £m | £m | £m | £m | £m | |
| Coatings & | |||||
| Construction | |||||
Solutions | 332.6 | – | – | (12.1) | 320.5 |
Adhesive Solutions | 24.1 | 1.3 | – | (0.9) | 24.5 |
| Health & Protection | |||||
| and Performance | |||||
Materials | 124.1 | – | – | (3.4) | 120.7 |
Total | 480.8 | 1.3 | 0.0 | (16.4) | 465.7 |
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Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
14 Goodwill continued
| Other | |||
| Customer | acquired | ||
| relationships | intangibles | Total | |
| £m | £m | £m | |
| Cost | |||
At 1 January 2024 | 488.0 | 108.6 | 596.6 |
Exchange adjustments | (1.6) | (0.1) | (1.7) |
At 31 December 2024 | 486.4 | 108.5 | 594.9 |
| Accumulated amortisation and impairment | |||
At 1 January 2024 | 129.6 | 14.5 | 14 4.1 |
Amortisation charge for the year | 37.6 | 7.5 | 45.1 |
Exchange adjustments | (1.3) | (0.1) | (1.4) |
At 31 December 2024 | 165.9 | 21.9 | 187.8 |
| Net book value | |||
At 31 December 2024 | 320.5 | 86.6 | 407.1 |
| Other | |||
| Customer | acquired | ||
| relationships | intangibles | Total | |
| £m | £m | £m | |
| Cost | |||
At 1 January 2023 | 525.6 | 117.4 | 643.0 |
Derecognition of fully amortised assets | (15.2) | (3.9) | (19.1) |
Exchange adjustments | (22.4) | (4.9) | (27.3) |
At 31 December 2023 | 488.0 | 108.6 | 596.6 |
| Accumulated amortisation and impairment | |||
At 1 January 2023 | 108.9 | 10.5 | 119.4 |
Amortisation charge for the year | 40.8 | 8.5 | 49.3 |
Derecognition of fully amortised assets | (15.2) | (3.9) | (19.1) |
Exchange adjustments | (4.9) | (0.6) | (5.5) |
At 31 December 2023 | 129.6 | 14.5 | 14 4.1 |
| Net book value | |||
At 31 December 2023 | 358.4 | 94.1 | 452.5 |
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| Other | Assets | ||
| intangible | under | ||
| assets | construction | Total | |
| £m | £m | £m | |
| Cost | |||
At 1 January 2024 | 107.0 | 1.7 | 108.7 |
Additions | 1.0 | 10.1 | 11.1 |
Disposals | (1.3) | – | (1.3) |
Transfer to held for sale | – | – | – |
Transfers from assets under construction | 11.1 | (11.1) | – |
Other transfers | – | – | – |
Exchange adjustments | (0.1) | 0.4 | 0.3 |
At 31 December 2024 | 117.7 | 1.1 | 118.8 |
| Accumulated amortisation | |||
At 1 January 2024 | 37.6 | – | 37.6 |
Amortisation charge for the year | 12.1 | – | 12.1 |
Disposals | (1.3) | – | (1.3) |
Exchange adjustments | (0.2) | – | (0.2) |
At 31 December 2024 | 48.2 | – | 48.2 |
| Net book value | |||
At 31 December 2024 | 69.5 | 1.1 | 70.6 |
| Other | Assets | ||
| intangible | under | ||
| assets | construction | Total | |
| £m | £m | £m | |
| Cost | |||
At 1 January 2023 | 90.9 | – | 90.9 |
Additions | 2.2 | 17.0 | 19.2 |
Disposals | (1.6) | – | (1.6) |
Transfer to held for sale | 14.7 | (14.7) | – |
Transfers | 1.7 | – | 1.7 |
Exchange adjustments | (0.9) | (0.6) | (1.5) |
At 31 December 2023 | 107.0 | 1.7 | 108.7 |
| Accumulated amortisation | |||
At 1 January 2023 | 30.0 | – | 30.0 |
Amortisation charge for the year | 8.8 | – | 8.8 |
Disposals | (1.5) | – | (1.5) |
Transfer to held for sale | – | – | – |
Transfers | 1.0 | – | 1.0 |
Exchange adjustments | (0.7) | – | (0.7) |
At 31 December 2023 | 37.6 | – | 37.6 |
| Net book value | |||
At 31 December 2023 | 69.4 | 1.7 | 71.1 |
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Owned assets | Right of use assets | ||||||
| Freehold land | Leasehold land | Plant and | Assets under | Land and | Plant and | ||
| and buildings | and buildings | equipment | construction | buildings | equipment | Total | |
| £m | £m | £m | £m | £m | £m | £m | |
| Cost | |||||||
At 1 January 2024 | 203.2 | 8.0 | 970.5 | 36.7 | 43.4 | 29.5 | 1,291.3 |
Additions | 3.6 | – | 25.1 | 54.5 | 5.2 | 7.7 | 96.1 |
Transfer to held for sale | (2.7) | – | (13.1) | – | – | – | (15.8) |
Sale of business | (1.9) | – | (11.4) | (0.3) | – | – | (13.6) |
Impairment | (1.1) | – | (1.2) | (3.7) | – | – | (6.0) |
Disposals | (4.0) | – | (12.4) | (0.1) | (1.7) | (3.9) | (22.1) |
Transfer from assets under construction | 2.2 | 0.8 | 7.1 | (10.1) | – | – | – |
Other transfers | – | – | – | – | – | – | – |
Exchange adjustments | (4.6) | – | (5.2) | (1.6) | (0.3) | (0.4) | (12.1) |
At 31 December 2024 | 194.7 | 8.8 | 959.4 | 75.4 | 46.6 | 32.9 | 1, 317.8 |
| Accumulated depreciation and impairment | |||||||
At 1 January 2024 | 62.2 | 5.1 | 495.5 | – | 12.8 | 10.0 | 585.6 |
Depreciation charge for the year | 7.5 | 0.2 | 65.5 | – | 4.2 | 6.9 | 84.3 |
Transfer to held for sale | (2.0) | – | (7.3) | – | – | – | (9.3) |
Sale of business | – | – | (8.4) | – | – | – | (8.4) |
Impairment | (0.1) | – | (0.2) | – | – | – | (0.3) |
Disposals | – | – | (11.2) | – | (1.7) | (4.1) | (17.0) |
Other transfers | (4.8) | 0.2 | 4.6 | – | – | – | – |
Exchange adjustments | (2.3) | (0.1) | (3.1) | – | – | (0.1) | (5.6) |
At 31 December 2024 | 60.5 | 5.4 | 535.4 | – | 15.3 | 12.7 | 629.3 |
| Net book value | |||||||
At 31 December 2024 | 134.2 | 3.4 | 424.0 | 75.4 | 31.3 | 20.2 | 688.5 |
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Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
17 Property, plant and equipment continued
Owned assets | Right of use assets | ||||||
| Freehold land | Leasehold land | Plant and | Assets under | Land and | Plant and | ||
| and buildings | and buildings | equipment | construction | buildings | equipment | Total | |
| £m | £m | £m | £m | £m | £m | £m | |
| Cost | |||||||
At 1 January 2023 | 213.1 | 9.5 | 996.9 | 3.2 | 35.8 | 33.9 | 1,292.4 |
Additions | 1.4 | – | 29.9 | 38.4 | 11.3 | 12.7 | 93.7 |
Purchase of business | – | – | – | 2.4 | – | – | 2.4 |
Transfer to held for sale | (6.6) | – | – | – | – | – | (6.6) |
Disposals | (1.9) | (1.0) | (10.2) | – | (2.4) | (15.8) | (31.3) |
Transfer from assets under construction | 5.3 | – | – | (5.3) | – | – | – |
Other transfers | – | – | (1.7) | – | – | – | (1.7) |
Exchange adjustments | (8.1) | (0.5) | (44.4) | (2.0) | (1.3) | (1.3) | (57.6) |
At 31 December 2023 | 203.2 | 8.0 | 970.5 | 36.7 | 43.4 | 29.5 | 1,291.3 |
| Accumulated depreciation and impairment | |||||||
At 1 January 2023 | 59.7 | 5.4 | 443.0 | – | 12.0 | 18.7 | 538.8 |
Depreciation charge for the year | 4.6 | 0.2 | 80.2 | – | 3.8 | 7.7 | 96.5 |
Transfer to held for sale | (5.2) | – | – | – | – | – | (5.2) |
Impairment | 5.6 | – | 0.3 | – | – | – | 5.9 |
Disposals | (0.5) | (0.1) | (6.8) | – | (2.6) | (15.8) | (25.8) |
Other transfers | – | – | (1.0) | – | – | – | (1.0) |
Exchange adjustments | (2.0) | (0.4) | (20.2) | – | (0.4) | (0.6) | (23.6) |
At 31 December 2023 | 62.2 | 5.1 | 495.5 | – | 12.8 | 10.0 | 585.6 |
| Net book value | |||||||
At 31 December 2023 | 141.0 | 2.9 | 475.0 | 36.7 | 30.6 | 19.5 | 705.7 |
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| Place of | Principal | |||
| Name of entity | incorporation | Ownership | activity | Segment |
| Synthomer Middle | Saudi | 49% | Manufacturer | Coatings & |
| East Company Ltd | Arabia | and sale of acrylic | Construction | |
| and vinyl resin | Solutions | |||
| emulsions | ||||
| Synthomer Functional | UAE | 49% | Trading in | Adhesive |
| Solutions FZCO | adhesives and | Solutions | ||
| oilfield chemicals | ||||
Synthomer FZCO | UAE | 49% | Sales and | Coatings & |
| marketing support | Construction | |||
| for Synthomer | Solutions | |||
| Group Companies | ||||
| Nanjing Yangzi | China | 50% | Manufacturer | Adhesive |
| Eastman Chemical Ltd | of hydrogenated | Solutions | ||
| hydrocarbon resins | ||||
Super Sky Ltd | United | 50% | Non-trading | Corporate |
| Kingdom |
| 2024 | 2023 | |
| £m | £m | |
Non-current assets | 12.2 | 12.4 |
Cash and cash equivalents | 3.7 | 6.2 |
Other current assets | 28.0 | 24.6 |
Total current assets | 31.7 | 30.8 |
Other current liabilities | (32.1) | (28.2) |
Total current liabilities | (32.1) | (28.2) |
Net assets | 11.8 | 15.0 |
| 2024 | 2023 | |
| £m | £m | |
Revenue | 90.3 | 91.3 |
Operating profit | 2.7 | 3.0 |
Taxation | (0.1) | (0.1) |
Profit for the year | 2.6 | 2.9 |
Exchange differences on translation | – | (0.1) |
Total comprehensive income | 2.6 | 2.8 |
Dividends paid | (2.1) | (3.4) |
Movement in retained earnings | 0.5 | (0.6) |
| Group share: | ||
Profit for the year | 1.3 | 1.4 |
Exchange differences on translation | – | – |
Dividends paid | (1.0) | (1.9) |
| 2024 | 2023 | |
| £m | £m | |
At 1 January | 7.5 | 8.1 |
Profit from continuing operations | 1.3 | 1.4 |
Exchange differences on translation | 0.3 | (0.1) |
Dividend paid | (1.0) | (1.9) |
At 31 December | 8.1 | 7.5 |
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19 Inventories
| 2024 | 2023 | |
| £m | £m | |
Raw materials and consumables | 167.5 | 163.4 |
Finished goods | 180.7 | 180.7 |
348.2 | 34 4.1 | |
Stock written off during the year | 6.0 | 8.0 |
Cost of inventory recognised as an expense and included in cost of sales | 1,238.3 | 1,258.0 |
The nature of the chemical reaction necessary to produce finished goods from raw
materials is such that ‘work in progress’ is not a material part of the Group’s inventory
at any given point of time.
| 2024 | 2023 | |
| £m | £m | |
Trade receivables | 155.8 | 147.6 |
Other receivables | 62.6 | 59.8 |
Prepayments | 8.8 | 5.6 |
227.2 | 213.0 |
| Trade receivables – days past due | |||||
| Not yet due | <60 | 61-120 | >120 | Total | |
| 2024 | £m | £m | £m | £m | £m |
Gross carrying amount | 139.9 | 13.6 | 0.3 | 3.1 | 156.9 |
Expected credit loss rate | 0.06% | ||||
Lifetime expected credit loss | (1.1) | ||||
Total | 155.8 |
| Trade receivables – days past due | |||||
| Not yet due | <60 | 61-120 | >120 | Total | |
| 2023 | £m | £m | £m | £m | £m |
Gross carrying amount | 120.6 | 21.9 | 4.8 | 1.4 | 148.7 |
Expected credit loss rate | 0.06% | ||||
Lifetime expected credit loss | (1.1) | ||||
Total | 147.6 |
| 2024 | 2023 | |
| £m | £m | |
At 1 January | 1.1 | 1.6 |
Exchange adjustments | (0.1) | (0.1) |
Transfer from credit impaired | 0.7 | 0.8 |
Uncollectable amounts recovered | (0.4) | (1.2) |
At 31 December | 1.3 | 1.1 |
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| Exchange | ||||
| 1 January | and other | 31 December | ||
| 2024 | Cash flows | movements | 2024 | |
| £m | £m | £m | £m | |
Bank overdrafts | (0.7) | 0.4 | – | (0.3) |
| €520m 3.875% senior unsecured | ||||
loan notes due 2025 | – | – | (123.9) | (123.9) |
Current bank borrowings | – | – | – | – |
Current liabilities | (0.7) | 0.4 | (123.9) | (124.2) |
Bank loans | (421.9) | 3.1 | 4.6 | (414.2) |
| €520m 3.875% senior unsecured | ||||
loan notes due 2025 | (448.4) | 318.8 | 129.6 | – |
| €350m 7.375% senior unsecured | ||||
loan notes due 2029 | – | (293.5) | 9.1 | (284.4) |
Non-current liabilities | (870.3) | 28.4 | 143.3 | (698.6) |
Total borrowings | (871.0) | 28.8 | 19.4 | (822.8) |
Cash and cash equivalents | 371.3 | (141.5) | (4.0) | 225.8 |
Net debt | (499.7) | (112.7) | 15.4 | (597.0) |
| Exchange | ||||
| 1 January | and other | 31 December | ||
| 2023 | Cash flows | movements | 2023 | |
| £m | £m | £m | £m | |
Bank overdrafts | (18.5) | 17.8 | – | (0.7) |
Current liabilities | (18.5) | 17.8 | – | (0.7) |
Bank loans | (777.7) | 343.6 | 12.2 | (421.9) |
| €520m 3.875% senior unsecured | ||||
loan notes due 2025 | (456.4) | – | 8.0 | (448.4) |
Non-current liabilities | (1,234.1) | 343.6 | 20.2 | (870.3) |
Total borrowings | (1,252.6) | 361.4 | 20.2 | (871.0) |
Cash and cash equivalents | 227.7 | 149.0 | (5.4) | 371.3 |
Net debt | (1,024.9) | 510.4 | 14.8 | (499.7) |
2024 | 2023 | |||
| Cash and | Cash and | |||
| cash | Total | cash | Total | |
| equivalents | borrowings | equivalents | borrowings | |
| £m | £m | £m | £m | |
Sterling | 21.4 | – | 117.5 | |
Euro | 92.1 | 651.8 | 116.4 | 700.8 |
US dollar | 65.7 | 183.8 | 79.5 | 180.7 |
Malaysian ringgit | 34.1 | – | 38.5 | – |
Other | 12.5 | – | 19.4 | – |
Total | 225.8 | 835.6 | 371.3 | 881.5 |
| Non cash changes | |||||
| Financing | |||||
| cash | Exchange | ||||
| 1 January | (inflows)/ | and other | 31 December | ||
| 2024 | outflows | Acquisitions | movements | 2024 | |
| £m | £m | £m | £m | £m | |
Borrowings | (870.3) | 28.4 | – | 143.3 | (698.6) |
Lease liabilities | (55.3) | 12.1 | – | (12.7) | (55.9) |
Total | (925.6) | 40.5 | – | 130.6 | (754.5) |
| Financing | |||||
| cash | Exchange | ||||
| 1 January | (inflows)/ | and other | 31 December | ||
| 2023 | outflows | Acquisitions | movements | 2023 | |
| £m | £m | £m | £m | £m | |
Borrowings | (1, 234.1) | 343.6 | – | 20.2 | (870.3) |
Lease liabilities | (45.5) | 12.4 | – | (22.2) | (55.3) |
Total | (1,279.6) | 356.0 | – | (2.0) | (925.6) |
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22 Financial instruments
The table below sets out the Group’s accounting classification of each class of financial assets and liabilities:
2024 | 2023 | |||||||
| Carrying | Carrying | |||||||
| Valuation | amount | amount | ||||||
| category in | Fair value | Carrying | within scope | Carrying | within scope | |||
| accordance | hierarchy | amount | of IFRS 7 | Fair value | amount | of IFRS 7 | Fair value | |
with IFRS 9 1 | level | £m | £m | £m | £m | £m | £m | |
Trade receivables | AC | Level 2 | 155.8 | 155.8 | 155.8 | 147.6 | 147.6 | 147.6 |
Other receivables | AC | Level 2 | 62.6 | 42.3 | 42.3 | 59.8 | 35.3 | 35.3 |
Cash and cash equivalents | AC | Level 2 | 225.8 | 225.8 | 225.8 | 371.3 | 371.3 | 371.3 |
Derivatives | FVTOCI | Level 2 | 2.8 | 2.8 | 2.8 | 5.5 | 5.5 | 5.5 |
Total assets | 447.0 | 426.7 | 426.7 | 584.2 | 559.7 | 559.7 | ||
Borrowings | AC | Level 2 | (822.8) | (822.8) | (835.6) | (871.0) | (871.0) | (881.5) |
Trade and other payables | AC | Level 2 | (391.7) | (379.0) | (379.0) | (431.5) | (419.9) | (419.9) |
Derivatives | FVTOCI | Level 2 | (1.6) | (1.6) | (1.6) | – | – | – |
Total liabilities | (1,216.1) | (1,203.4) | (1,216.2) | (1,302.5) | (1,290.9) | (1,301.4) |
1. AC: amortised cost; FVTOCI: fair value through other comprehensive income; FVTPL: fair value through profit or loss; a more detailed description of the categories can be found in note 2.
The fair value of the Group’s borrowings at 31 December 2024 was £835.6m (31 December 2023: £881.5m).
As at 31 December 2024 £1.0m (2023: £4.3m) of the interest rate swap derivatives were designated as being in a hedging relationship.
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22 Financial instruments continued
2024 | 2023 | |||||
| Floating rate | Fixed rate | Total | Floating rate | Fixed rate | Total | |
| borrowings | borrowings | borrowings | borrowings | borrowings | borrowings | |
| £m | £m | £m | £m | £m | £m | |
Euro | 22.8 | 629.1 | 651.9 | 31.3 | 669.5 | 700.8 |
US dollar | 83.9 | 99.9 | 183.8 | 75.6 | 105.1 | 180.7 |
Total | 106.7 | 729.0 | 835.7 | 106.9 | 774.6 | 881.5 |
2024 | 2023 | |||||
Income statement | Equity | Income statement | Equity | |||
| Underlying | IFRS | IFRS | Underlying | IFRS | IFRS | |
| -/+ £m | -/+ £m | -/+ £m | -/+ £m | -/+ £m | -/+ £m | |
| Interest rate sensitivity analysis | ||||||
UK interest rate +/- 1.0% | 0.2 | 0.2 | – | 1.2 | – | – |
Euro interest rate +/- 1.0% | 0.7 | 0.7 | 2.2 | 0.9 | – | 2.3 |
US interest rate +/- 1.0% | (0.2) | (0.2) | 1.0 | – | – | 0.9 |
| Foreign currency sensitivity analysis | ||||||
Sterling -/+ 10% | 0.3 | 0.3 | – | 5.8 | 5.8 | 9.4 |
Euro exchange rate -/+ 10% | (1.8) | (1.8) | (3.2) | 11.9 | 11.9 | 0.9 |
US dollar exchange rate -/+ 10% | 0.7 | 0.7 | (2.4) | 7.6 | 7.6 | 9.4 |
Malaysian ringgit exchange rate -/+ 10% | – | – | – | 0.6 | 0.6 | – |
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22 Financial instruments continued
Market risk sensitivity analysis continued
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22 Financial instruments continued
2024 | 2023 | |||||
Amount due | Amount due | |||||
| Within | Between | Between | Within | Between | Between | |
| one year | 1 and 2 years | 2 and 5 years | one year | 1 and 2 years | 2 and 5 years | |
| £m | £m | £m | £m | £m | £m | |
Overdrafts | (0.3) | – | – | (0.7) | – | – |
Financial liabilities in trade and other payables | (378.9) | – | (0.1) | (419.7) | (0.1) | (0.1) |
Bank loans – principal | – | – | (421.7) | – | – | (429.9) |
€520m 3.875% senior unsecured loan notes due 2025 | (124.1) | – | – | – | (450.9) | – |
€350m 3.875% senior unsecured loan notes due 2029 | – | – | (289.6) | – | – | – |
Interest payments on borrowings | (39.2) | (36.7) | (62.0) | (41.8) | (13.4) | (7.4) |
Total non-derivative financial liabilities | (542.5) | (36.7) | (773.4) | (462.2) | (464.4) | (4 37.4) |
2024 | 2023 | |||||||
Amount due | Amount due | |||||||
| Within | Between | Between | Within | Between | Between | |||
| one year | 1 and 2 years | 2 and 5 years | Total | one year | 1 and 2 years | 2 and 5 years | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | |
Interest rate swaps | 2.2 | 0.2 | 0.4 | 2.8 | 6.3 | 4.2 | – | 10.5 |
Currency forwards | 0.3 | – | – | 0.3 | 5.5 | – | – | 5.5 |
Total derivative financial assets | 2.5 | 0.2 | 0.4 | 3.1 | 11.8 | 4.2 | – | 16.0 |
Interest rate swaps | 0.4 | 0.4 | 0.9 | 1.7 | – | – | – | – |
Currency forwards | 0.5 | – | – | 0.5 | 1.7 | 1.7 | 2.9 | 6.3 |
Total derivative financial liabilities | 0.9 | 0.4 | 0.9 | 2.2 | 1.7 | 1.7 | 2.9 | 6.3 |
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22 Financial instruments continued
2024 | 2023 | |||||||||
| Expiring | Expiring | Expiring | Expiring | |||||||
| Expiring | between | between | Expiring | Expiring | between | between | Expiring | |||
| within | 1 and | 2 and 5 | after | within | 1 and | 2 and 5 | after | |||
| one year | 2 years | years | 5 years | Total | one year | 2 years | years | 5 years | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
| Unsecured €300m multi-currency | ||||||||||
| RCF expiring 31 July 2027 | ||||||||||
(amended from $400m in 2023) | – | – | 228.6 | – | 228.6 | – | – | 314.2 | – | 314.2 |
– | – | 228.6 | – | 228.6 | – | – | 314.2 | – | 314.2 |
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22 Financial instruments continued
Hedged risk | Notional amount | Maturity | Range of hedged rates | |
| 2024 | ||||
| Cash flow hedges | ||||
Interest rate swap | Interest rate | Up to €260m and $125m | 28/08/2018 – 10/10/2027 | 0.517% to 4.637% Fixed |
| Net investment hedges | ||||
Net investment | Currency | Up to €560m | 01/04/2020 – present | 1.17-1.21 |
Net investment | Currency | Up to $230m | 01/04/2020 – present | 1.24-1.32 |
| 2023 | ||||
| Cash flow hedges | ||||
Interest rate swap | Interest rate | Up to €440m and $125m | 28/08/2018 – 10/10/2027 | 0.517% to 4.637% Fixed |
| Net investment hedges | ||||
Net investment | Currency | Up to €560m | 01/04/2020 – present | 1.11-1.17 |
Net investment | Currency | Up to $370m | 01/04/2020 – present | 1.18-1.31 |
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22 Financial instruments continued
Receivables financing
During the year, the Group continued to sell amounts receivable from customers to
a third party on a non-recourse basis. As a result, £111.7m of trade receivables were
sold and derecognised as at December 2024. A corresponding asset of £24.4m has
been recognised in respect of deferred purchase price reserves, which represent
a portion of the original receivables. This balance has been recorded within “Other
receivables” in note 20.
These reserves are subsequently paid by the counterparties to the agreements,
whether the customer pays the receivable in full or not. The fair value of these
assets is considered to be the same as the carrying value.
23 Leases
The Group has a portfolio of leases mainly comprising land and buildings, chemical
storage tanks and vehicles. Further details are given in note 2.
Information in respect of right of use assets, including the carrying amount, additions
and depreciation, are set out in note 17 to these financial statements. Information
in respect of the carrying value is set out below and information in respect of interest
arising on lease liabilities is set out in note 9.
Synthomer also enters into short-term leases and low-value leases, which are not
recognised as right of use assets and lease liabilities. The expense recognised in the
year in relation to these leases is not material. Synthomer has no material exposure to
variable lease payments, extension options, residual value guarantees, or committed
leases not yet commenced.
The total cash outflow for leases in the year was as follows:
| 2024 | 2023 | |
| £m | £m | |
Payments for the principal portion of lease liabilities | 12.1 | 12.4 |
Payments for the interest portion of lease liabilities | 2.4 | 1.8 |
Lease liabilities included in the balance sheet are as follows:
| 2024 | 2023 | |
| £m | £m | |
Current | 12.3 | 13.8 |
Non-current | 43.6 | 41.5 |
55.9 | 55.3 |
The following table details the maturity of contractual undiscounted cash flows for
lease liabilities:
| 2024 | 2023 | |
| £m | £m | |
Less than one year | 12.0 | 13.8 |
Between one and two years | 9.6 | 9.8 |
Between two and five years | 15.9 | 17.5 |
More than five years | 57.0 | 41.7 |
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| 2024 | 2023 | |
| £m | £m | |
| Amount due within one year | ||
Trade payables | 261.9 | 272.1 |
Other payables | 26.6 | 68.1 |
Accruals | 103.1 | 91.1 |
391.6 | 431.3 | |
| Amount due after one year | ||
Accruals | 0.1 | 0.2 |
0.1 | 0.2 |
| Restructuring | |||
| and site | |||
| Environmental | closure | Total | |
| £m | £m | £m | |
At 1 January 2024 | 10.3 | 31.2 | 41.5 |
Charge/(credit) to income statement during the year | (0.2) | 1.1 | 0.9 |
Utilised during the year | (0.6) | (6.7) | (7.3) |
Exchange adjustments | (0.4) | 0.6 | 0.2 |
31 December 2024 | 9.1 | 26.2 | 35.3 |
| 31 December | 31 December | |
| 2024 | 2023 | |
| £m | £m | |
Non-current | 27.5 | 29.6 |
Current | 7.8 | 11.9 |
35.3 | 41.5 |
| 2024 | 2023 | |
| £m | £m | |
Underlying performance | – | – |
Special Items | 0.9 | (0.2) |
0.9 | (0.2) |
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| 2024 | |||||
| UK | US | Germany | Other | Total | |
| £m | £m | £m | £m | £m | |
Defined contribution | 3.5 | 2.6 | 0.1 | 5.1 | 11.3 |
| 2023 | |||||
| UK | US | Germany | Other | Total | |
| £m | £m | £m | £m | £m | |
Defined contribution | 3.6 | 4.5 | 1.0 | 4.9 | 14.0 |
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Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
26 Retirement benefit obligations continued
Asset return risk | The plan liabilities are calculated using a discount rate set with reference to corporate bond yields; if plan assets underperform this yield, this will |
| increase the deficit. | |
Interest rate risk | A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plan assets |
| in bond holdings. | |
Longevity risk | The majority of the plans’ obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the |
| plans’ liabilities. |
2024 | 2023 | |||||||||
| UK | US | Germany | Other | Total | UK | US | Germany | Other | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
Service cost | 6.1 | 0.6 | 0.2 | 0.1 | 7.0 | 0.3 | 0.6 | 0.2 | 0.7 | 1.8 |
Net interest (income)/expense | (1.1) | 0.4 | 2.0 | 0.4 | 1.7 | (0.4) | 0.5 | 2.2 | 0.4 | 2.7 |
5.0 | 1.0 | 2.2 | 0.5 | 8.7 | (0.1) | 1.1 | 2.4 | 1.1 | 4.5 |
2024 | 2023 | |||||||||
| UK | US | Germany | Other | Total | UK | US | Germany | Other | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
| Return on plan assets excluding amounts | ||||||||||
included in interest expense | (22.0) | (5.7) | – | – | (27.7 ) | 8.6 | 7.6 | – | – | 16.2 |
Gains/(losses) from changes in assumptions | 18.2 | 5.6 | 2.0 | (0.2) | 25.6 | (3.4) | (5.0) | (3.7) | (1.2) | (13.3) |
Actuarial gains and losses | (3.8) | (0.1) | 2.0 | (0.2) | (2.1) | 5.2 | 2.6 | (3.7) | (1.2) | 2.9 |
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Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
26 Retirement benefit obligations continued
2024 | 2023 | |||||||||
| UK | US | Germany | Other | Total | UK | US | Germany | Other | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
Present value of defined benefit obligation | (251.2) | (157.6) | (57.8) | (14.4) | (481.0) | (269.6) | (166.5) | (63.0) | (15.5) | (514.6) |
Fair value of schemes’ assets | 277.2 | 148.5 | 2.5 | 3.1 | 431.3 | 286.1 | 158.3 | 2.6 | 2.9 | 449.9 |
| Net asset/(liability) arising from defined | ||||||||||
benefit obligation | 26.0 | (9.1) | (55.3) | (11.3) | (49.7) | 16.5 | (8.2) | (60.4) | (12.6) | (64.7) |
2024 | 2023 | |||||||||
| UK | US | Germany | Other | Total | UK | US | Germany | Other | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
At 1 January | 286.1 | 158.3 | 2.6 | 2.9 | 449.9 | 274.8 | 165.3 | 3.1 | 3.1 | 446.3 |
Interest income | 12.9 | 7.3 | – | 0.1 | 20.3 | 13.5 | 7.9 | – | 0.1 | 21.5 |
| Amounts recognised in income in respect | ||||||||||
of defined benefit schemes | 12.9 | 7.3 | – | 0.1 | 20.3 | 13.5 | 7.9 | – | 0.1 | 21.5 |
| Remeasurement: | ||||||||||
| – Return on plan assets excluding amounts | ||||||||||
included in interest income | (22.0) | (5.7) | – | – | (27.7) | 8.6 | 7.6 | – | – | 16.2 |
| Amounts recognised in the statement | ||||||||||
of comprehensive income | (22.0) | (5.7) | – | – | (27.7) | 8.6 | 7.6 | – | – | 16.2 |
| Contributions: | ||||||||||
– Employers | 16.6 | 0.3 | – | 1.1 | 18.0 | 5.0 | 0.4 | – | 0.5 | 5.9 |
| Payments from plans | ||||||||||
– Benefit payments | (16.4) | (14.2) | – | (0.9) | (31.5) | (15.8) | (14.5) | – | (0.6) | (30.9) |
0.2 | (13.9) | – | 0.2 | (13.5) | (10.8) | (14.1) | – | (0.1) | (25.0) | |
Exchange adjustments | – | 2.5 | (0.1) | (0.1) | 2.3 | – | (8.4) | (0.5) | (0.2) | (9.1) |
At 31 December | 277.2 | 148.5 | 2.5 | 3.1 | 431.3 | 286.1 | 158.3 | 2.6 | 2.9 | 449.9 |
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Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
26 Retirement benefit obligations continued
2024 | 2023 | |||||
| UK | US | Germany | UK | US | Germany | |
| £m | £m | £m | £m | £m | £m | |
Investment funds | 31.1 | – | – | 30.6 | – | – |
Equities | 44.1 | – | – | 47.0 | 38.6 | 1.3 |
Debt instruments | 186.1 | 135.8 | 2.5 | 195.3 | 111.9 | 1.3 |
Property | 4.4 | 7.5 | – | 5.8 | 7.8 | – |
Annuity assets | 2.5 | – | – | 2.4 | – | – |
Cash and cash equivalents | 9.0 | 5.2 | – | 5.0 | – | – |
Fair value of schemes’ assets | 277.2 | 148.5 | 2.5 | 286.1 | 158.3 | 2.6 |
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Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
26 Retirement benefit obligations continued
2024 | 2023 | |||||||||
| UK | US | Germany | Other | Total | UK | US | Germany | Other | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
At 1 January | (269.6) | (166.5) | (63.0) | (15.5) | (514.6) | (268.9) | (175.9) | (60.8) | (14.1) | (519.7) |
Current service cost | (1.7) | (0.6) | (0.2) | (0.1) | (2.6) | (0.3) | (0.7) | (0.2) | (0.5) | (1.7) |
Past service cost | (4.4) | – | – | – | (4.4) | – | 0.1 | – | (0.2) | (0.1) |
Interest expense | (11.8) | ( 7.7 ) | (2.0) | (0.5) | (22.0) | (13.1) | (8.4) | (2.2) | (0.5) | (24.2) |
| Amounts recognised in income statement | ||||||||||
in respect of defined benefit schemes | (17.9) | (8.3) | (2.2) | (0.6) | (29.0) | (13.4) | (9.0) | (2.4) | (1.2) | (26.0) |
| Remeasurement gains/(losses) from: | ||||||||||
| – Changes in financial assumptions | 20.0 | 7.3 | 1.5 | (0.1) | 28.7 | (14.0) | (3.8) | (3.2) | (1.7) | (22.7) |
| – Changes in demographic assumptions | (1.7) | 0.1 | – | (0.1) | (1.7) | 12.0 | (0.9) | – | – | 11.1 |
| – Experience adjustments | (0.1) | (1.8) | 0.5 | – | (1.4) | (1.4) | (0.3) | (0.5) | 0.5 | (1.7) |
| Amounts recognised in the statement | ||||||||||
of comprehensive income | 18.2 | 5.6 | 2.0 | (0.2) | 25.6 | (3.4) | (5.0) | (3.7) | (1.2) | (13.3) |
| Contributions: | ||||||||||
| – Employers | 1.7 | – | 2.6 | 0.2 | 4.5 | 0.3 | – | 2.6 | 0.3 | 3.2 |
| Payments from plans | ||||||||||
– Benefit payments | 16.4 | 14.2 | – | 0.9 | 31.5 | 15.8 | 14.5 | – | 0.6 | 30.9 |
18.1 | 14.2 | 2.6 | 1.1 | 36.0 | 16.1 | 14.5 | 2.6 | 0.9 | 34.1 | |
Exchange adjustments | – | (2.6) | 2.8 | 0.8 | 1.0 | – | 8.9 | 1.3 | 0.1 | 10.3 |
At 31 December | (251.2) | (157.6) | (57.8) | (14.4) | (481.0) | (269.6) | (166.5) | (63.0) | (15.5) | (514.6) |
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Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
26 Retirement benefit obligations continued
2024 | 2023 | |||||||
UK | US | Germany | Other | UK | US | Germany | Other | |
Rate of increase in pensions in payment | 3.00% | 0.00% | 1.00% | 2.1%–9% | 2.90% | 0.00% | 2.50% | 2.1%–9% |
Rate of increase in pensions in deferment | 2.75% | 0.00% | 2.50% | 3.50% | 2.60% | 0.00% | 1.00% | 3.5%–9% |
Discount rate | 5.30% | 5.50% | 3.50% | 2.7%–10.5% | 4.50% | 4.94% | 3.30% | 3.1%–9.25% |
Inflation assumption | 3.20% | 0.00% | 2.25% | 2%–2.2% | 3.05% | 0.00% | 2.25% | 2%–2.4% |
2024 | 2023 | |||||||||||
Retiring today | Retiring in 20 years | Retiring today | Retiring in 20 years | |||||||||
UK | US | Germany | UK | US | Germany | UK | US | Germany | UK | US | Germany | |
Males | 86.0 | 86.6 | 85.9 | 86.9 | 87.6 | 88.6 | 85.9 | 86.6 | 85.8 | 86.7 | 87.5 | 88.5 |
Females | 88.5 | 87.6 | 89.3 | 89.3 | 88.7 | 91.5 | 88.3 | 87.6 | 89.2 | 89.1 | 88.6 | 91.4 |
| Increase in scheme liabilities | |||
| UK | US | Germany | |
| £m | £m | £m | |
Discount rate (decrease of 1%) | 27.0 | 13.5 | 7.9 |
Future mortality rate (one year increase in expectancy) | 11.0 | 4.6 | 2.2 |
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Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
27 Share capital and reserves
| 2024 | 2023 | 2024 | 2023 | ||
| Number | Number | £m | £m | ||
| Ordinary shares | |||||
| Ordinary shares of 10p | |||||
in issue at 1 January | 163,567,621 | 4 | 67,336,041 | 1.6 | 46.7 |
Share consolidation | – | (443,969,238) | – | (46.5) | |
Issued in year | – | 140,200,818 | – | 1.4 | |
| Ordinary shares of 1p in issue | |||||
at 31 December | 163,567,621 | 163,567,621 | 1.6 | 1.6 |
| 2024 | 2023 | |
| £m | £m | |
Balance at 1 January | 925.9 | 620.0 |
Share consolidation | – | 46.5 |
Premium arising on issue of shares | – | 274.8 |
Expenses of issue of shares | – | (15.4) |
Balance at 31 December | 925.9 | 925.9 |
| 2024 | 2023 | |
| £m | £m | |
Balance at 1 January | 209.8 | 273.5 |
Dividends paid | – | – |
Net loss for the year | (72.6) | (67.0) |
Actuarial (losses)/gains recognised in other comprehensive income | (2.1) | 2.9 |
Tax arising from other comprehensive income | 0.1 | (1.0) |
Credit to equity for equity-settled share-based payments | 1.5 | 1.4 |
Balance at 31 December | 136.7 | 209.8 |
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Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
27 Share capital and reserves continued
| Cash flow | |||
| hedging | Translation | ||
| reserve | reserve | Total | |
| £m | £m | £m | |
Balance at 1 January 2024 | (8.0) | 18.4 | 10.4 |
Exchange differences on translation of foreign operations | – | 3.8 | 3.8 |
Gains on net investment hedges taken to equity | – | 11.9 | 11.9 |
| Loss recognised on cash flow hedges: | |||
– Interest rate swaps | (3.3) | – | (3.3) |
| Reclassification to profit or loss: | |||
| – Exchange differences recycled on sale | |||
of business | – | 4.4 | 4.4 |
Balance at 31 December 2024 | (11.3) | 38.5 | 27.2 |
| Cash flow | |||
| hedging | Translation | ||
| reserve | reserve | Total | |
| £m | £m | £m | |
Balance at 1 January 2023 | (0.3) | 76.2 | 75.9 |
Exchange differences on translation of foreign operations | – | (58.3) | (58.3) |
Gains on net investment hedges taken to equity | – | 1.0 | 1.0 |
Loss recognised on cash flow hedges: | – | – | |
– Interest rate swaps | (7.7) | – | (7.7) |
Reclassification to profit or loss: | – | – | |
| – Exchange differences recycled on sale | |||
of business | – | (0.5) | (0.5) |
Balance at 31 December 2023 | (8.0) | 18.4 | 10.4 |
28 Reconciliation of operating profit/(loss) to cash generated
from operations
Continuing and discontinued operations:
| 2024 | 2023 | |
| £m | £m | |
Operating (loss)/profit | (25.9) | 17.7 |
Less: share of profits of joint ventures | (1.6) | (1.4) |
(27.5) | 16.3 | |
| Adjustments for: | ||
– Depreciation of property, plant and equipment | 73.2 | 85.0 |
– Depreciation of right of use assets | 11.1 | 11.5 |
– Amortisation of other intangibles | 12.1 | 8.8 |
– Share-based payments | 1.6 | 1.8 |
– Gain on sale of underlying assets | (4.3) | – |
– Special Items | 78.7 | 16.1 |
| Cash impact of settlement of interest rate | ||
derivative contracts | – | 12.1 |
Cash impact of restructuring and site closure costs | (20.2) | (28.0) |
Cash impact of acquisition costs and related gains | (1.7) | (1.9) |
Pension funding in excess of service cost | (19.8) | (7.3) |
Movement in working capital | (24.9) | 80.6 |
Payment of EC fine settlement amount | (39.1) | – |
Cash generated from operations | 39.2 | 195.0 |
| Reconciliation of movement in working capital | ||
(Increase)/decrease in inventories | (15.5) | 45.7 |
(Increase)/decrease in trade and other receivables | (23.4) | 52.7 |
Increase/(decrease) in trade and other payables | 14.0 | (17.8) |
Movement in working capital | (24.9) | 80.6 |
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Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
| 2024 | 2023 | |
| £m | £m | |
| Key management compensation | ||
Short-term employee benefits | 7.5 | 6.9 |
Pension costs | 0.2 | 0.6 |
Share-based payments | 1.6 | 1.8 |
9.3 | 9.3 |
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Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
2024 | 2023 | |||||||
| Laminates | Laminates | |||||||
| Films and | NA Paper | Films and | NA Paper | |||||
| Coated Fabrics | and Carpet | Total | Coated Fabrics | and Carpet | Total | |||
| Compounds | £m | £m | £m | Compounds | £m | £m | £m | |
Revenue | 9.8 | – | – | 9.8 | 30.3 | 28.0 | 22.3 | 80.6 |
Expenses | (7.2) | – | – | ( 7.2) | (25.6) | (25.5) | (27.8) | (78.9) |
EBITDA | 2.6 | – | – | 2.6 | 4.7 | 2.5 | (5.5) | 1.7 |
Depreciation and amortisation – Underlying performance | (0.2) | – | – | (0.2) | (0.4) | – | (0.9) | (1.3) |
Operating profit/(loss) – Underlying performance | 2.4 | – | – | 2.4 | 4.3 | 2.5 | (6.4) | 0.4 |
Special Items | (3.3) | 0.2 | (1.1) | (4.2) | (0.2) | 61.5 | (4.5) | 56.8 |
Operating (loss)/profit – IFRS | (0.9) | 0.2 | (1.1) | (1.8) | 4.1 | 64.0 | (10.9) | 57.2 |
Finance costs | – | – | – | 0.0 | – | – | – | – |
(Loss)/profit before taxation | (0.9) | 0.2 | (1.1) | (1.8) | 4.1 | 64.0 | (10.9) | 57.2 |
Taxation | (0.8) | – | – | (0.8) | (1.8) | (17.6) | – | (19.4) |
(Loss)/Profit for the year | (1.7) | 0.2 | (1.1) | (2.6) | 2.3 | 46.4 | (10.9) | 37.8 |
| Cash flows from discontinued operations | ||||||||
Net cash outflow from operating activities | (3.6) | – | (1.1) | (4.7) | 7.5 | (0.1) | (7.8) | (0.4) |
Net cash inflow from investing activities | 17.5 | (0.1) | – | 17.4 | (0.6) | 208.2 | – | 207.6 |
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Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
30 Discontinued operations continued
| 2024 | 2023 | ||
| Note | £m | £m | |
| Non-current assets | |||
Goodwill | 14 | – | – |
Acquired intangible assets | 15 | – | – |
Other intangible assets | 16 | – | – |
Property, plant and equipment | 17 | 6.5 | 1.4 |
Deferred tax assets | 11 | – | 0.1 |
Total non-current assets | 6.5 | 1.5 | |
| Current assets | |||
Inventories | – | – | |
Trade and other receivables | – | – | |
Total current assets | – | – | |
Total assets | 6.5 | 1.5 | |
| Current liabilities | |||
Trade and other payables | – | – | |
Lease liabilities | – | – | |
Current tax liabilities | – | – | |
Total current liabilities | – | – | |
| Non-current liabilities | |||
Lease liabilities | – | – | |
Deferred tax liabilities | – | – | |
Retirement benefit obligations | 26 | – | – |
Total non-current liabilities | – | – | |
Total liabilities | – | – | |
Net assets held for sale | 6.5 | 1.5 |
32 Share-based payments
Executive share option schemes
The Group’s share option scheme is described in the Directors’ remuneration report
on pages 101 to 116.
In addition to the two executive directors, it is available to other senior management.
Movement in the options held under the scheme are defined as follows:
| Weighted av. | Weighted av. | |||
| exercise | exercise | |||
| Options | price (£) | Options | price (£) | |
| 2024 | 2024 | 2023 | 2023 | |
| number | number | number | number | |
Outstanding at 1 January | 845,401 | – | 3,273,222 | – |
Granted during the year | 1,911,425 | – | 4,612,178 | – |
Exercised during the year | (10,062) | – | (313,491) | – |
Lapsed during the year | (184,019) | – | (909,299) | – |
| Adjustment for share | ||||
consolidation and rights issue | – | – | (5,817, 209) | – |
Outstanding at 31 December | 2,562,745 | – | 845,401 | – |
Exercisable at 31 December | 10,278 | 5,463 |
The outstanding share options were all issued under the Performance Share Plan.
As at 31 December 2024 the following options were outstanding:
Executive share options | Number |
Exercisable between 2023-2030 | 4,520 |
Exercisable between 2024-2031 | 5,758 |
Exercisable between 2025-2032 | 201,630 |
Exercisable between 2026-2033 | 547,854 |
Exercisable between 2027-2034 | 1,802,983 |
| 2,562,745 |
The total exercise price for all the above grants is £nil.
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OTHER INFORMATION
Groupfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
32 Share-based payments continued
For options outstanding as at 31 December 2024, the exercise price was £nil and the
weighted average remaining contractual life was 5.62 years (2023: 5.57 years).
The weighted average share price at the date of exercise was £2.49 (2023: £1.09).
The weighted average fair value of the options at the measurement date granted
during the year was £1.88 (2023: £1.05). The valuation was based on the following
inputs and assumptions, using a Monte Carlo simulation model:
2024 | 2023 | |
Weighted average share price (£) | 1.88 | 1.05 |
Option price (£) | – | – |
Value of optionality | nil | nil |
Vesting assumption | 41% | 30% |
• •
Equity value - Based on the Company’s equity value inclusive of preference shares.
• •
Expected term – Vesting date of April 2027 has been assumed.
• •
Volatility – 63.49% has been used based on the historical volatility of Synthomer
and a number of quoted peer companies using a look-back period equal to the
2.69-year simulation term.
• •
Risk free rate – 4.22% based on UK Government bond rates as at the valuation date.
The vesting assumption is the estimate at the measurement date of the percentage
of the options that will ultimately vest and is based on market conditions and
management’s assessment of the likelihood of achievement of the performance criteria.
The charge in the year in relation to the equity settled scheme was £1.5m (2023: £1.8m).
The Group also operates a cash-settled share-based payment scheme for which there
was a charge in the year of £0.5m (2023: credit of £0.1m) and for which there was
a liability at the year end of £0.7m (2023: £0.3m).
The Synthomer Employee Benefit Trust
The Company established a trust, the Yule Catto Employee Benefit Trust, on 17 July
1996 to distribute shares to employees enabling the obligations under the Yule Catto
Longer-Term Performance Share Plan and the Yule Catto Longer-Term Deferred
Bonus Plan to be met.
The Trust is managed by the RBC Trustees (Guernsey) Limited, an independent
company located in Guernsey.
At 31 December 2024, the Trust held 96,516 (2023: 708) ordinary shares in the
Company with a market value of £0.2m (2023: £nil).
The dividends on these shares have been waived. All the shares are under option.
Costs are amortised over the life of the plans.
33 Share price information
The middle market value of the listed ordinary shares at 31 December 2024 was
161.0 pence (31 December 2023: 189.70 pence). During the year, the market price
ranged between 336.0 pence and 118.0 pence. The latest ordinary share price is
available on the Group’s website.
34 Post balance sheet events
As part of the Group’s previously announced non-core portfolio rationalisation
programme, there are three formal divestment processes underway for non-core
businesses in Europe, currently incorporated within the Health & Protection and
Performance Materials division. Given progress made since the year end, the Directors
now consider it is more likely than not that at least one of these processes will lead to
a divestment within the next 12 months.
35 Audit exemptions
The following subsidiaries have taken advantage of the exemption from an audit for
the year ended 31 December 2024 available under s479a of the Companies Act 2006
as the Company has given a statutory guarantee of all of the outstanding liabilities of
these subsidiaries as at 31 December 2024.
Company | Registration |
Dimex Limited | 01763129 |
Ecatto Limited | 00978441 |
Harlow Chemical Company Limited | 00778831 |
Polymerlatex Limited | 03439041 |
Revertex Limited | 00873653 |
Super Sky Limited | 02021871 |
Synthomer Adhesive Technologies Limited | 13827669 |
Synthomer Thailand Holdings Limited | 14625368 |
Synthomer Overseas Limited | 06349474 |
Temple Fields 514 Limited | 04541637 |
Temple Fields 515 Limited | 00692510 |
Temple Fields 522 Limited | 05516912 |
Temple Fields 523 Limited | 05516913 |
Temple Fields 530 Limited | 00831113 |
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FINANCIAL STATEMENTS
OTHER INFORMATION
Note
2024
£m
2023
£m
Non-current assets
Property, plant and equipment 4 7.0 3.0
Other intangible assets 5 59.9 60.4
Investments in subsidiaries and joint ventures 3 896.5 737.5
Other debtors: amounts falling due after more than one year 6 1,567.2 1,913.5
Deferred tax assets 2.9 2.5
Total non-current assets 2,533.5 2,716.9
Current assets
Other debtors: amounts falling due within one year 6 693.4 81.8
Cash and cash equivalents 129.0 228.5
Derivative financial instruments 6.3 9.8
Total current assets 828.7 320.1
Current liabilities
Borrowings 9 (123.9) –
Other payables 7 (853.5) (514.6)
Provisions – –
Derivative financial instruments (1.6) –
Lease liabilities (0.2) (0.7)
Total current liabilities (979.2) (515.3)
Net current assets (150.5) (195.2)
Total assets less current liabilities 2,383.0 2,521.7
Companystatementoffinancialposition
as at 31 December 2024
Companyfinancialstatements
Synthomer plc Annual Report 2024180
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OTHER INFORMATION
Companyfinancialstatements
Note
2024
£m
2023
£m
Non-current liabilities
Borrowings 9 (698.6) (870.3)
Lease liabilities (4.9) (0.3)
Total non-current liabilities (703.5) (870.6)
Net assets 1,679.5 1,651.1
Equity
Share capital 11 1.6 1.6
Share premium 925.9 925.9
Revaluation reserve 0.8 0.8
Capital redemption reserve 0.9 0.9
Retained earnings 750.3 721.9
Shareholders' funds – all equity
Minority interests
Total equity 1,679.5 1,651.1
AspermittedbySection408oftheCompaniesAct2006,noseparateprofitandlossaccountorstatementofcomprehensiveincomeispresentedfor
Synthomerplc.Asdisclosedinnote2,theCompany’sprofitfortheyearwas£30 .2 m(2023:£1 19 .7 m).
The notes on pages 183 to 189areanintegralpartofthesefinancialstatements.ThefinancialstatementsofSynthomerplc(registerednumber98381)
onpages180 to 181wereapprovedbytheBoardofDirectorsandauthorisedforissueon11March2025.
They are signed on its behalf by:
M Willome Director L Liu Director
Company statement of financial position continued
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FINANCIAL STATEMENTS
OTHER INFORMATION
CompanyfinancialstatementsCompanyfinancialstatements
Share
capital
£m
Share
premium
£m
Revaluation
reserve
£m
Capital
redemption
reserve
£m
Retained
earnings
£m
Total
£m
Balance as at 1 January 2024 1.6 925.9 0.8 0.9 721.9 1,651.1
Profit for the year – – – – 30.2 30.2
Total comprehensive income for the year – – – – 30.2 30.2
Share consolidation – – – – – –
Issue of shares – – – – – –
Dividends – – – – – –
Share-based payments – – – – 1.5 1.5
Fair value loss on hedged interest rate derivatives – – – – (3.3) (3.3)
As at 31 December 2024 1.6 925.9 0.8 0.9 750.3 1,679.5
At 1 January 2023 46.7 620.0 0.8 0.9 608.5 1,276.9
Profit for the year – – – – 119.7 119.7
Total comprehensive income for the year – – – – 119.7 119.7
Share consolidation (46.5) 46.5 – – – –
Issue of shares 1.4 259.4 – – – 260.8
Dividends – – – – – –
Share-based payments – – – – 1.4 1.4
Fair value loss on hedged interest rate derivatives – – – – (7.7) (7.7)
As at 31 December 2023 1.6 925.9 0.8 0.9 721.9 1,651.1
Statementofchangesinequity
as at 31 December 2024
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FINANCIAL STATEMENTS
OTHER INFORMATION
Companyfinancialstatements
1 Material accounting policies
TheseparatefinancialstatementsoftheCompanyarepresentedasrequiredbythe
CompaniesAct2006.TheCompanymeetsthedefinitionofaqualifyingentityunder
FRS100ApplicationofFinancialReportingRequirementsissuedbytheFRC.
Accordingly,thesefinancialstatementswerepreparedinaccordancewithFRS101
ReducedDisclosureFramework.
As permitted by FRS 101, the Company has taken advantage of the disclosure
exemptions available under that standard in relation to share-based payments,
financialinstruments,capitalmanagement,presentationofacashflowstatement,
standardsnotyeteffectiveandcertainrelatedpartytransactions.
Whererequired,equivalentdisclosuresaregivenintheconsolidatedfinancial
statements.
Thefinancialstatementshavebeenpreparedonagoingconcernbasisandunderthe
historicalcostbasisexceptfortheremeasurementofcertainfinancialinstruments
thataremeasuredatfairvaluesattheendofeachreportingperiod.
Various disclosures make reference to items considered material or immaterial to the
financialstatements.TheCompanyconsidersinformationtobematerialifomittingit
ormisstatingitcouldinfluencedecisionsthatusersmakeonthebasisofthefinancial
informationprovided.Materialityisconsideredfrombothaquantitativeandqualitative
factorperspective.Inadditiontosubsequentspecificreferencestomateriality,andin
compliancewithFRS101,certaindisclosureshavenotbeenprovidedwherethe
informationresultingfromthatdisclosureisnotmaterial.
The basis of accounting and the principal accounting policies adopted are the same as
thosesetoutinnote2totheconsolidatedfinancialstatementsexceptasnotedbelow.
TheCompanywasinanetcurrentliabilitiespositionasat31December2024,this
positionisduetotheamountsowedtoGroupundertakings.TheDirectorshave
receivedconfirmationfromSynthomerTradingLimited,towhom£406.7mwasowed
atthebalancesheetdate,thattheywillnotcallforrepaymentoftheseamountsforat
least12monthsfromthedateoftheapprovalofthesefinancialstatements.
Investmentsinsubsidiariesandjointventuresarestatedatcostless,where
appropriate,provisionsforimpairment.ThecarryingamountsoftheCompany’s
investmentsarereviewedateachreportingdatetodeterminewhetherthereisan
indicationofimpairment.Ifsuchanindicationexists,thentheasset’srecoverable
amountisestimated.Lossesarerecognisedintheincomestatementandreflectedin
anallowanceagainstthecarryingvalue.Whenasubsequenteventcausestheamount
of impairment loss to decrease, the decrease in impairment loss is reversed through
theincomestatement.
Intercompanybalancesareshowngrossunlessarightofset-offexists.Balancesare
valuedatfairvalueatinceptionandarerepayableondemand.Allintercompanyloans
arerepayableondemandandtheCompanyhastheabilitytorefinanceanyofits
subsidiariesusingequityallowingthesubsidiarytorepayanyreceivablesowedto
Synthomerplc.
Dividend distributions to the Company’s shareholders are recognised as a liability in
theCompany’sfinancialstatementsintheperiodinwhichthedividendsareapproved
bytheCompany’sshareholders.
Therearenosignificantaccountingjudgementsandestimatesappliedinpreparing
theCompany’saccountexceptfortheimpairmenttestingofamountsowedby
subsidiaryundertakings.Whenmeasuringthepotentialimpairmentofreceivables
fromsubsidiaries,forward-lookinginformationbasedonassumptionsforthefuture
movementofdifferenteconomicdriversareconsidered.
2 Profit attributable to equity shareholders
AspermittedbySection408oftheCompaniesAct2006,noseparateprofitandloss
accountorstatementofcomprehensiveincomeispresentedforSynthomerplc.
TheCompanyreportedaprofitof£30.2mfortheyearended31December2024
(2023:profitof£119.7m).Auditorremunerationforauditandotherservicesis
disclosedinnote7totheconsolidatedfinancialstatements.TheCompanyhadno
employeesduringthecurrentorprioryear.
3 Investments in subsidiaries and joint ventures
2024 2023
Subsidiaries
£m
Joint
ventures
£m
Total
£m
Subsidiaries
£m
Joint
ventures
£m
Total
£m
Cost
At 1 January 737.2 0.5 737.7 733.1 0.5 733.6
Additions 161.0 – 161.0 4.1 – 4.1
Impairment (2.0) – (2.0) – – –
At 31 December 896.2 0.5 896.7 737.2 0.5 737.7
Provisions
At 1 January and
31 December – (0.2) (0.2) – (0.2) (0.2)
Net book value
At 31 December 896.2 0.3 896.5 737.2 0.3 737.5
DetailsoftheGroup’ssubsidiariesandjointventuresareincludedinnote12onpages
187 and 189.
Notestothefinancialstatements–Synthomerplc
as at 31 December 2024
Synthomer plc Annual Report 2024183
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FINANCIAL STATEMENTS
OTHER INFORMATION
Companyfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
4 Property, plant and equipment
Land and buildings
2024 2023
Right of use
buildings
£m
Freehold land
and buildings
£m
Plant and
equipment
£m
Total
£m
Right of use
buildings
£m
Freehold land
and buildings
£m
Plant and
equipment
£m
Total
£m
Cost
At 1 January 4.1 3.0 0.1 7.2 4.1 3.0 0.1 7.2
Additions 5.2 – – 5.2 – – – –
Disposals (0.5) (0.3) – (0.8)
At 31 December 8.8 2.7 0.1 11.6 4.1 3.0 0.1 7.2
Accumulated depreciation
At 1 January 3.1 1.0 0.1 4.2 2.5 1.0 – 3.5
Charge for the year 0.8 – – 0.8 0.6 – 0.1 0.7
Disposals (0.4) – – (0.4)
At 31 December 3.5 1.0 0.1 4.6 3.1 1.0 0.1 4.2
Net book value
At 31 December 5.3 1.7 – 7.0 1.0 2.0 – 3.0
Freeholdlandamountingto£1.5m(2023:£1.8m)hasnotbeendepreciated.
Synthomer plc Annual Report 2024184
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FINANCIAL STATEMENTS
OTHER INFORMATION
Companyfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
5 Other intangible assets
2024
£m
2023
£m
Cost
At 1 January 74.1 63.0
Additions 0.9 4.2
Transfers from Group undertakings 7.7 6.9
At 31 December 82.7 74.1
Accumulated depreciation
At 1 January 13.7 7.3
Charge for the year 9.1 6.4
At 31 December 22.8 13.7
Net book value
At 31 December 59.9 60.4
6 Debtors
2024
£m
2023
£m
Amounts owed by Group undertakings: amounts falling
due within one year 689.0 77.6
Amounts owed by Group undertakings: amounts falling
due after more than one year 1,567.2 1,913.5
Other debtors 1.2 2.3
Prepayments and accrued income 3.2 1.9
2,260.6 1,995.3
AmountsowedbyGroupundertakingsareunsecuredandvaluedatfairvalueat
inception.Interestischargedatarm’slengthandreceivablepertheagreementin
place.OftheCompany’samountsowedbyGroupundertakings,£162.4misimpaired
(2023:£162.4m).Futureexpectedcreditlossesonamountsreceivablefrom
subsidiariesareimmaterial.
7 Other payables
2024
£m
2023
£m
Amount due within one year
Amounts owed to Group undertakings 829.6 450.5
Other creditors 6.9 43.4
Accruals and deferred income 17.0 20.7
853.5 514.6
AmountsowedtoGroupundertakingsareunsecuredandvaluedatfairvalueat
inceptionandarerepayableondemand.Interestischargedatarm’slengthand
payablepertheagreementinplace.
8 Guarantees and other financial commitments
TheCompanyhasgivenguaranteesamountingto£nil(2023:£nil)inrespectofbank
andotherfacilitiesofsubsidiariesandjointventures.
9 Borrowings
2024
£m
2023
£m
Current borrowings
Bank loans
€520m 3.875% senior unsecured loan notes due 2025 123.9 –
Current borrowings – –
123.9 –
Non-current borrowings
Bank loans
Bank loans 414.2 421.9
€520m 3.875% senior unsecured loan notes due 2025 – 448.4
€350m 3.875% senior unsecured loan notes due 2029 284.4 –
698.6 870.3
Detailsofborrowingsareprovidedinnote21totheconsolidatedfinancialstatements.
Synthomer plc Annual Report 2024185
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FINANCIAL STATEMENTS
OTHER INFORMATION
Companyfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
10 Financial instruments
ThefairvalueoffinancialinstrumentshasbeendisclosedintheCompany’sstatementoffinancialpositionas:
2024 2023
Valuation
category in
accordance
with IFRS 9
1
Fair value
hierarchy
level
Carrying
amount
£m
Carrying amount
within scope
of IFRS 7
£m
Fair value
£m
Carrying
amount
£m
Carrying amount
within scope
of IFRS 7
£m
Fair value
£m
Other receivables AC Level 2 2,260.6 2,257.4 2,257.4 1,995.3 1,993.4 1,993.4
Cash and cash equivalents AC Level 2 129.0 129.0 129.0 228.5 228.5 228.5
Derivatives FVTOCI Level 2 6.3 6.3 6.3 9.8 5.5 5.5
Total assets 2,395.9 2,392.7 2,392.7 2,233.6 2, 227.4 2, 227.4
Borrowings AC Level 2 (822.5) (822.5) (835.3) (870.3) (870.3) (884.5)
Trade and other payables AC Level 2 (853.5) (853.4) (853.4) (514.6) (514.5) (514.5)
Derivatives FVTOCI Level 2 (1.6) (1.6) (1.6) – – –
Total liabilities (1,677.6) (1,677.5) (1,690.3) (1,384.9) (1,384.8) (1,399.0)
1 AC:amortisedcost;FVTOCI:fairvaluethroughothercomprehensiveincome;FVTPL:fairvaluethroughprofitorloss.
Afullerdescriptionoffinancialinstrumentsisincludedinnote22oftheconsolidatedfinancialstatementsonpage160.
11 Share capital
DetailsoftheCompany’ssharecapitalandoutstandingshareoptionsareshowninnote27oftheconsolidatedfinancialstatementsonpage174.
Synthomer plc Annual Report 2024186
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FINANCIAL STATEMENTS
OTHER INFORMATION
Companyfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
12 Subsidiaries and joint ventures
Country of incorporation and registered address Principal activity Ownership %
United Kingdom
Central Road, Harlow, Essex, CM20 2BH
Dimex Limited Holding Company 100
Ecatto Limited Holding Company 100
3
Harlow Chemical Company Limited Holding Company 100
2
PolymerLatex Limited Holding Company 100
Revertex Limited Dormant 100
3
Super Sky Limited Holding Company 50
1,3
Synthomer Adhesive Technology Limited Non-Trading 100
Synthomer (UK) Limited Trading 100
Synthomer Holdings Limited Holding Company 100
3
Synthomer Holdings Thailand Limited Non-Trading 100
Synthomer Overseas Limited Holding Company 100
3
Temple Fields 514 Limited Holding Company 100
3
Temple Fields 515 Limited Non-Trading 100
Temple Fields 522 Limited Holding Company 100
3
Temple Fields 523 Limited Non-Trading 100
3
Temple Fields 530 Limited Non-Trading 100
William Blythe Limited Trading 100
45 Pall Mall, London, SW1Y 5JG
Synthomer Trading Limited Trading 100
44 Esplanade, St Helier, Jersey, JE4 9WG
Synthomer Jersey Limited Non-Trading 100
3
Austria
Industriepark, Pischelsdorf, 3435
Synthomer Austria GmbH Trading 100
Country of incorporation and registered address Principal activity Ownership %
China
Building 53-55, 1000 Zhangheng Road, Zhangjiang Hi-Tech Park,
Pudong, Shanghai, 201203
Shanghai Synthomer Chemicals Co Ltd Trading 100
210 Zhou Gong Road, Shanghai Chemical Industry Park,
Shanghai201507
Synthomer Fine Chemicals (Shanghai) Co Ltd Trading 100
308 Jiangbin Road, Xiaogang United Development Zone,
NingboEconomic & Technical Development Zone, Ningbo, 315803
Synthomer Fine Chemicals (Ningbo) Co Ltd Trading 100
55 Xi Li Road, China (Shanghai) Pilot Free Trade Zone,
Shanghai,200131
Eliokem Trading (Shanghai) Co Ltd Trading 100
No1 Yanhe Road, Nanjing Chemical park, Nanjing
Nanjing Yangzi Eastman Chemical Ltd Trading 50
1
Czech Republic
Tovární 2093, Sokolov, 356 01
Synthomer AS Trading 100
V Celnici 1031/4, Prague, 110 00
Synthomer Czech s.r.o Holding 100
France
21 Rue Jean Rostand, Orsay, 91400
Synthomer Holdings France SAS Holding Company 100
Synthomer International SAS Holding Company 100
Synthomer Speciality Chemicals SAS Trading 100
704 Rue Pierre et Marie Curie, Ribécourt-Dreslincourt, 60170
Synthomer France SAS Trading 100
Notes
1 Jointventures.
2 HarlowChemicalCompanyLimitedisincorporatedintheUKbutisresidentintheNetherlands.
3 SharesdirectlyheldbySynthomerplc.
Synthomer plc Annual Report 2024187
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FINANCIAL STATEMENTS
OTHER INFORMATION
Companyfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
Country of incorporation and registered address Principal activity Ownership %
Germany
Werrastrasse 10, Marl, 45768
Synthomer Deutschland GmbH Trading 100
Temple Fields GmbH Non-Trading 100
Yule Catto Holdings GmbH Holding Company 100
India
1001, Meadows, Sahar Plaza, Andheri-Kurla Road, Andheri East,
Mumbai 400059
Synthomer India Trading LLP Trading 100
Italy
Via delle Industrie 9, Filago, BG, 24040
Synthomer S.r.l. Trading 100
Via Morozzo 27, Sant’Albano Stura, CN, 12040
Synthomer Specialty Resins S.r.l. Trading 100
Malaysia
Unit 16-2, Wisma Uoa Damansara II, 6 Changkat Semantan,
Damansara Heights, Kuala Lumpur, 50490
Kind Action (M) Sdn Bhd Trading 70
PolymerLatex Sdn Bhd Trading 100
Quality Polymer Sdn Bhd Non-Trading 70
Revertex (Malaysia) Sdn Bhd Trading 70
Synthomer Sdn Bhd Trading 100
Terra Simfoni Sdn Bhd Holding Company 100
Country of incorporation and registered address Principal activity Ownership %
Mauritius
c/o Citco (Mauritius) Limited, Tower A, 1 Exchange Square,
WallStreet,Ebene
Synthomer Asia Pacific Corp Holding Company 100
Standard Charted Tower, 19 Cybercity, Ebene
Synthomer China Holdings Limited Holding Company 100
Mexico
Blvd. Paseo General Lazaro Cardenas No. 844 Col. La Magdalena,
Uruapan, Michoacan, Mexico C.P. 60080
Synthomer Mexico, S.A. de C.V. Trading 100
Netherlands
Ijsselstraat 41, Oss, 5347 KG
Yule Catto BV Non-Trading 100
Yule Catto Nederland BV Holding Company 100
Herculesweg 35, 4338 PL Middelburg
Synthomer Middelburg B.V. Trading 100
Portugal
Rua Francisco Lyon de Castro, 28, 2725-397 Mem Martins
Synthomer (Portugal) SA Trading 100
Lyon28 – Imobiliario SA Property Letting 100
Saudi Arabia
27 Street, 2nd Industrial City, Dammam, 31472
Synthomer Middle East Company Ltd Trading 49
1
12 Subsidiaries and joint ventures continued
Synthomer plc Annual Report 2024188
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FINANCIAL STATEMENTS
OTHER INFORMATION
Companyfinancialstatements / Notestotheconsolidatedfinancialstatementscontinued
Country of incorporation and registered address Principal activity Ownership %
Spain
Camino de Sangroniz 8, Sondika, 48150
Synthomer Asua SL Trading 100
Rambla de Catalunya 53, Barcelona, 08007
Yule Catto Spain SL Non-Trading 100
Sweden
Tostarpsvagen 11, Kavlinge, 244 32
Synthomer Speciality Additives AB Trading 100
UAE
Building 2101, Office S10122A2, Jabel Ali Free Zone, Dubai
Synthomer Functional Solutions FZCO Trading 49
1
East Wing 2, Office 201, Po Box 54645, Dubai Airport Free Zone, Dubai
Synthomer FZCO Trading 49
1
USA
1201 Peachtree Street NE, Atlanta, GA, 30361
Synthomer LLC Trading 100
Yule Catto Inc Holding Company 100
160 Greentree Drive, Suite 101, Dover, DE, 19904
Synthomer USA LLC Trading 100
25435 Harvard Road, Beachwood, Ohio 44122-6201
Synthomer Inc Trading 100
Synthomer Adhesive Technologies LLC Trading 100
Synthomer Jefferson Hills LLC Trading 100
Synthomer NBR Solutions LLC Dormant 100
Vietnam
8, 6th Street, Song Than Industrial Park, Di An
Synthomer Vietnam Co Ltd Trading 60
Notes
1 Jointventures.
2 HarlowChemicalCompanyLimitedisincorporatedintheUKbutisresidentintheNetherlands.
3 SharesdirectlyheldbySynthomerplc.
12 Subsidiaries and joint ventures continued
Synthomer plc Annual Report 2024189
STRATEGIC REPORT GOVERNANCE REPORT
FINANCIAL STATEMENTS
OTHER INFORMATION
Building
Revenue increased by 5.1% and continuing EBITDA by 9.2%
in constant currency in 2024, despite mixed end-market
demand trends.
Other information
191 Environmental performance summary
195 GlobalReportingInitiative(GRI)contentindex
198 Glossary of terms
200 Historicalfinancialsummary
201 Advisers
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Synthomer plc Annual Report 2024190
Environmental performance summary
2024
a
2023
a
2022
a
2021
b
2020
b
Baseline year
2019
a
Variance
2024 vs 2023
Variance
2024 vs 2019
Energy Consumption – GJ
Absolute energy consumption
1
Group 5,692,630 5,681,673 6,194,661 5,035,920 4,919,295 4,964,234 0.2% 14.7%
UK only 285,722 282,461 321,034 339,579 340,477 329,741 1.2% -13.3%
Group energy consumption by source
Natural gas 3,346,534 3,297, 460 3,374,052 2,146,659 2,0 47,624 2,075,657 1.5% 61.2%
Light and heavy oils and GLP 297,937 278,152 336,728 24,782 28,310 32,997 7.1% 802.9%
Steam and hot water (metered) 726,932 835,579 873,923 892,030 883,941 999,288 -13.0% -27.3%
Electricity (metered) 1,321,228 1,270,481 1,329,683 1,222,002 1,263,276 1,253,575 4.0% 5.4%
Coal 0 0 280,275 750,448 696,145 602,716 n/a -100.0%
Specific energy consumption (GJ/tonne production)
Group 4.21 4.06 3.95 2.89 2.79 2.73 3.6% 54.0%
UK only 3.85 4.64 5.05 4.32 3.95 4.22 -17.0% -8.8%
Group refrigerant releases – HCFC and others – kg
Absolute 1,682 3,099 2,442 1,783 1,670 2,000 -45.7% -15.9%
Specific (kg/tonne production) 0.00 0.0022 0.0016 0.001 0.0009 0.0011 -45.5% 9.1%
Greenhouse gas (GHG) emissions - tonnes CO
2
e
2, 3, 4, 5, 6
Absolute Scope 1 GHG emissions
Group 241,151 230,798 270,849 225,949 219,564 309,645 4.5% -22.1%
UK only 10,389 10,223 11,963 12,721 12,867 12,429 1.6% -16.4%
Absolute Scope 2 GHG emissions – Market based
Group 64,086 97,984 105,942 83,857 183,429 259,040 -34.6% -75.3%
UK only 8,171 6,443 5,815 5,893 6,266 5,308 26.8% 53.9%
Absolute Scope 2 GHG emissions – Location based
Group 174,605 207,957 209,500 210,899 226,537 263,745 -16.0% -33.8%
UK only 9,669 7,682 7,5 45 7,887 8,785 8,367 25.9% 15.6%
Absolute Scope 1&2 GHG emissions – Market based
Group 305,237 328,782 376,791 309,806 402,993 568,685 -7.2% -46.3%
UK only 18,560 16,666 17,778 18,613 19,133 17,737 11.4% 4.6%
Synthomer plc Annual Report 2024191
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Environmental performance summary continued
2024
a
2023
a
2022
a
2021
b
2020
b
Baseline year
2019
a
Variance
2024 vs 2023
Variance
2024 vs 2019
Specific Scope 1 and 2 GHG emissions
Group (tonnes CO
2
e/tonne production) 0.23 0.24 0.24 0.178 0.228 0.289 -4.3% -22.1%
UK only (tonnes CO
2
e/tonne production) 0.25 0.274 0.28 0.237 0.222 0.227 -8.8% 10.1%
Absolute Group Scope 1 and 2 GHG emissions by source
(tonnes CO
2
e)
From energy³ 252,599 289,190 326,992 270,097 362,222 513,994 -12.7% -50.9%
From process emissions 50,195 41,454 43,807 34,724 35,916 47,164 21.1% 6.4%
From refrigerant releases 2,443 4,138 5,992 4,985 4,855 7,527 -41.0% -67.5%
Absolute Scope 3 GHG emissions (tonnes CO
2
e)
7
Group 2,629,696 2,568,929 2,550,967 2,318,828 n/a 3,204,702 2.4% -17.9%
Specific Scope 3 GHG emissions
Group (tonnes CO
2
e/tonne production) 1.94 1.83 1.56 1.33 n/a 1.41 5.9% 37.6%
Other emissions to air
Other emissions to air – absolute (tonnes)
Sulphur dioxide (SO2) 23.42 14.08 44.61 122.13 132.24 126.28 66.3% -81.5%
Nitrous oxides (NO
x
)
8
195.16 162.92 164.89 230.67 229.51 201.98 19.8% -3.4%
Particulate matter (PM) 48.53 24.68 29.66 n/a n/a n/a 96.6% n/a
Volatile organic compounds (VOCs) 475.56 298.67 529.78 268.08 246.79 231.34 59.2% 105.6%
Other emissions to air – specific (kg/tonne production)
Sulphur dioxide (SO2) 0.02 0.01 0.03 0.07 0.08 0.07 70.0% -75.7%
Nitrous oxides (NO
x
)
8
0.14 0.12 0.11 0.13 0.13 0.11 22.4% 27.9%
Particulate matter (PM) 0.04 0.02 0.02 n/a n/a n/a 94.4% n/a
Volatile organic compounds (VOCs) 0.35 0.21 0.34 0.15 0.14 0.13 62.1% 173.2%
Group water usage – m³9
Total water withdrawal 7,131,716 7,066,045 8,090,588 7,747,617 7, 202,458 7,142,707 0.9% -0.2%
Specific water withdrawal (m³/tonne production) 5.27 5.05 5.16 4.45 4.08 3.93 4.4% 34.1%
Total water withdrawal by source
Public potable supply 2,248,948 2,105,024 2,225,772 1,664,140 1,639,818 1,755,650 6.8% 28.1%
Raw water from river 2,696,248 2,681,342 3,231,223 3, 357,138 2,992,894 2,810,402 0.6% - 4.1%
Raw water from borehole 771,770 782,757 1,058,105 1,327,913 1,158,464 1,192,088 -1.4% -35.3%
Raw water from canal 41,232 38,932 54,018 80,039 70,609 65,012 5.9% -36.6%
Raw water from other 1,373,518 1,457,990 1,521,470 1,318,387 1,340,673 1,319,556 -5.8% 4.1%
Synthomer plc Annual Report 2024192
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Environmental performance summary continued
2024
a
2023
a
2022
a
2021
b
2020
b
Baseline year
2019
a
Variance
2024 vs 2023
Variance
2024 vs 2019
Total water consumption
9
1,972,144 2,020,273 2,565,882 n/a n/a n/a -2.4% n/a
Specific water consumption (m³/tonne production) 1.46 1.44 1.64 n/a n/a n/a 1.4% n/a
Group waste management – tonnes
Group waste (total)
Absolute 50,382 50,358 62,454 39,708 39,852 49,364 0.0% 2.1%
Specific (kg/tonne production) 37.21 36.01 39.83 22.81 22.58 27.19 3.0% 36.4%
Group waste (landfill)
Absolute 12,332 12,772 17, 298 9,345 9,487 12,353 -3.4% -0.2%
Specific (kg/tonne production) 9.10 9.13 11.03 5.37 5.38 6.8 -0.3% 33.8%
Group waste (hazardous)
Absolute 28,865 27,367 35,591 22,674 21,402 23,128 5.5% 24.8%
Specific (kg/tonne production) 21.32 19.57 22.7 13.03 12.13 12.74 8.9% 67.3%
Group waste (non-hazardous)
Absolute 21,517 22,991 26,863 17,03 4 18,450 26,236 -6.4% -18.0%
Specific (kg/tonne production) 15.89 16.44 17.13 9.79 10.45 14.45 -3.3% 10.0%
Hazardous waste by source
Recycled – energy recovery 7,020 8,677 10,684 2,931 3,244 3,777 -19.1% 85.9%
Recycled – separated – reprocessed 9,548 7,222 7,914 5,065 6,418 5,959 32.2% 60.2%
Incinerated – no energy recovery 3,681 4,126 5,392 2,738 1,611 1,430 -10.8% 157.4%
Disposed by landfill 1,876 1,565 2,755 3,235 2,276 1,643 19.9% 14.2%
Other 6,740 5,777 8,845 10,141 8,567 11,100 16.7% -39.3%
Non-hazardous waste by source
Recycled – energy recovery 3,292 3,232 3,714 4,278 4,475 8,176 1.9% -59.7%
Recycled – separated – reprocessed 3,879 3,006 3,503 2,836 2,377 2,275 29.0% 70.5%
Incinerated – no energy recovery 87 75 124 22.31 17.03 186 16.0% -53.2%
Disposed by landfill 10,447 11,206 14,544 8,011 8,170 11,808 -6.8% -11.5%
Other – municipality 3,813 5,471 4,977 1,887 3,411 3,791 -30.3% 0.6%
Sites that are zero production waste to landfill
Number 11.00 10 n/a n/a n/a n/a n/a n/a
Proportion of Group revenue 17.00 26.5 n/a n/a n/a n/a n/a
Proportion of Group production volume 22.50 36 n/a n/a n/a n/a n/a n/a
Synthomer plc Annual Report 2024193
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Environmental performance summary continued
2024
a
2023
a
2022
a
2021
b
2020
b
Baseline year
2019
a
Variance
2024 vs 2023
Variance
2024 vs 2019
Production sales volume
Group 1,353,915.0 1,398,480 1,567,931 1,740,475 1,764,768 1,968,264 -3.2% -31.2%
UK only 74,214.0 60,901 63,583 78,612 86,170 78,196 21.9% -5.1%
Additional TCFD Metrics
10
Financial intensity (tonnes CO
2
e/£m)
Scope 1 and 2 GHG emissions (revenue) 154 167 137 121 245 390 -7.8% -60.5%
Scope 1 and 2 GHG emissions (EBITDA) 2,076 2,411 1,421 593 1,554 3,197 -13.9% -35.1%
Scope 3 GHG emissions (revenue) 1,169 1,268 944 995 n/a 2,051 -7.8% -43.0%
Scope 3 GHG emissions (EBITDA) 15,794 18,422 9,209 4,440 n/a 16,821 -14.3% -6.1%
Scope 1, 2 and 3 GHG emissions (revenue) 1,323 1,434 1,090 1,128 n/a 2,441 -7.7% -45.8%
Scope 1, 2 and 3 GHG emissions (EBITDA) 17,871 20,833 10,631 5,034 n/a 20,017 -14.2% -10.7%
Sites with an ETS or equivalent – %
Proportion of Group Scope 1 GHG emissions 62.0 57.7 59.6 62.3 61.6 60.7 7.5% 2.14%
Proportion of Group production volume 15.0 13.6 n/a n/a n/a n/a 10.3% n/a
Proportion of Group revenue 16.0 19.2 n/a n/a n/a n/a -16.7% n/a
Capex for sustainability projects (%) 9 n/a n/a n/a n/a n/a n/a n/a
Sites in extremely high-risk location for water stress
11
Number 3 3 n/a n/a n/a n/a 0.0% n/a
Proportion of Group water use 11.8 10.9 n/a n/a n/a n/a 8.3% n/a
Proportion of Group revenue 12.5 12.4 n/a n/a n/a n/a 0.8% n/a
EnvironmentalperformancemetricsandKPIdatacoversallmanufacturingoperationsandmajoroffice/technicalcentresunderSynthomeroperationalcontrolforthecalendaryearsstated.Datainthesetablesexcludesallnon-tradingandoffice/
sales-relatedsubsidiariesandjointventures.Scope1,2and3GHGresultshavethird-partyassurance.
GHGemissioncalculationsfollowGHGprotocolrulesforScopes1,2and3,withScope1and2reportingreflectingoperationalcontrolboundaries.DetailsonScope3calculationscanbefoundonSynthomer’s2024Scope3report.
a DataherereferstoGroupcompositionasofend2024.2019GHGdatahasbeenre-calculatedtoreflectallacquisitionsanddivestmentsasthisisthebaselineyearforourScope1-3emissionstargets.2019,2022&2023havebeenre-baselined
forupdatedGWPemissionfactors.
b DataherereflectsthecompositionoftheGroupatthetime.
1 Datarelatestositeusageofallfuels,excludingtransportofgoodstoandfromsiteandthemovementofthesevehiclesonsite.Internaltransportonsiteisincluded.
2 Scope1and2GHGemissionshavebeencalculatedfromtheusageofallfuels,excludingthird-partytransportfuel.Includesbothdirectemissionsandindirectemissionsrelatedtoimportedelectricity,steam,compressedair,coolingwateretc.,
withtheexceptionoftransmissionanddistributionlossesforelectricity,whichareconsideredasScope3andhavenotbeenestimated.Scope1processemissionsarenowincludedfortwospecificprocessesontwosites.
3 CO
2
equivalentemissionsincludecontributionsfromCH
4
and N
2
Oassociatedwithcombustion.
4 AlldirectenergyproductionfromfossilfuelshasbeenaggregatedonaGroup-widebasisandconvertedtoCO
2
ebyusingtheappropriateemissionsfactors.Scope2emissionsassociatedwithelectricityhavebeencalculatedusingtwo
differentmethodsasperGHGProtocolrequirements:
Marketbased:usingmarket-basedemissionsfactorsforelectricityfromsuppliersofstandardgridfuelmixtariffs,andemissionfactorsofzerowhereverifiablerenewabletariffsorrenewablecertificateswithguaranteesoforiginhavebeen
purchased.Incaseswheresupplieremissionsfactorswerenotavailable,theresidualmixfactorwasusedforEUandUKsitesandtheLocationBaseapproachfornon-EUsites.
Locationbased:usingemissionsfactorsfromDEFRA(datasetpublishedinJune2024)forUKgridelectricity,USEPAInventoryeGRIDsub-regionfactorsforUSsites(January2024dataset)and,forothercountries,gridelectricityfromthe
relevant IEA (International Energy Authority) ‘World CO
2
EmissionsfromFuelCombustion’databases.InaccordancewithUKGovernmentguidance,factorsusedfor2024reportingarebasedon2021validateddata.
Scope2emissionsassociatedwithimportedsteamhavebeenestimatedusingverifiedemissionfactorsprovidedbythesupplierswhereavailable.Wherenotavailable,theUKDEFRAheatandsteamfactorhasbeenused.
5 ThetotalScope1and2GHGfigureisthetotaloftheCO
2
equivalentemissionsassociatedwithenergy,refrigerantreleaseandrelevantprocessemissioncontributions.
6 OurStallingboroughsiteintheUKissuppliedwithmostofitselectricityfromanadjacentmunicipalwasteincinerator.Butsincethewasteisbothrenewableandnon-renewable,thesitehassomeassociatedemissions.
In2024,theemissionsfromthiselectricitywere0.427kgCO
2
eperkWh,basedonourdeterminationofthefactorsusedfortheClimateChangeAgreementsubmission.
7 Scope3GHGemissionshavebeencalculatedfollowingtheGHGprotocol.DetailscanbefoundinourClimateactioninsightpaper.
8 NO
x
emissionsarepredominantlythosefromcombustionprocesses.TheCO
2
equivalentGlobalWarmingPotentialcontributionfromthesereleasesisalreadyincludedintheCO
2
fromtheenergyfigureabove.
9 Sinceadoptingamoreaccurateandholisticwatermassbalanceapproachin2022,wearenotreportingwaterconsumptionforearlieryears.
10 TCFDmetricsarecalculatedusingGHGdatastatedinthistableandrevenuefiguresstatedintheAnnualReport2024.
11 PrioritysitesforwaterstresshavebeenidentifiedbycombininglocalriskfactorsusingWRIAqueducttoolandrelativewaterdemand.
Synthomer plc Annual Report 2024194
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Global reporting initiative (GRI) content index
Statement of use
SynthomerplchasreportedtheinformationcitedinthisGRIcontentindexfortheperiod1January2024to31December2024withreferencetotheGRIStandards.
ThistablereferencestheGRIUniversalStandards2021andidentifieswhereSynthomeraddresseseachdisclosuretopic–the2024AnnualReport,theseparate2024ESG
Datapack, and our website.
GRI Standards used
GRIUniversalStandards2021(GRI1:Foundation2021,GRI2:GeneralDisclosures2021,GRI3:MaterialTopics2021)andmaterialGRITopicStandards.
GRI standard Disclosure Location
GRI 2:
General Disclosures 2021
2-1 Organisational details 1-4, 135, 144-146, back cover
2-2 Entities included in the organisation’s sustainability reporting 194
2-3 Reporting period, frequency and contact point 26, 195
2-4 Restatements of information 195
2-5 External assurance Synthomer ESG Datapack
2-6 Activities, value chain and other business relationships 1-4, 20-40
2-7 Employees 36-40, 43, Synthomer ESG Datapack
2-9 Governance structure and composition 45-48, 58-59, 70-73, 75
2-10 Nomination and selection of the highest governance body 95-97
2-11 Chair of the highest governance body 70
2-12 Role of the highest governance body in overseeing the management of impacts 45-48, 58-62, 75
2-13 Delegation of responsibility for managing impacts 75
2-14 Role of the highest governance body in sustainability reporting 75, 87-94
2-15 Conflicts of interest 55, 82-86
2-16 Communication of critical concerns 55, 76-86, ESG Datapack
2-17 Collective knowledge of the highest governance body 69-73
2-18 Review of the performance of the highest governance body 68
2-19 Remuneration policies 86, 98-102
2-20 Process to determine remuneration 86, 98-102
2-21 Annual total compensation ratio 114
2-22 Statement on sustainable development strategy 5-6, 8-9, 65-68
2-23 Policy commitments 63
2-24 Embedding policy commitments 63
2-25 Processes to remediate negative impacts 45-56, 63
2-26 Mechanisms for seeking advice and raising concerns 55, 83
Synthomer plc Annual Report 2024195
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
GRI content index continued
GRI standard Disclosure Location
GRI 2:
General Disclosures 2021 continued
2-27 Compliance with laws and regulations 55, 62, 63
2-28 Membership associations 29, 31
2-29 Approach to stakeholder engagement 26-31, 36, 76-81
2-30 Collective bargaining agreements Synthomer ESG Datapack
GRI 3:
Material Topics 2021
3-1 Process to determine material topics 30
3-2 List of material topics 30, 49-56
3-3 Management of material topics 30-31, 45-48
GRI 201:
Economic Performance 2016
201-1 Direct economic value generated and distributed 129-134
201-2 Financial implications and other risks and opportunities due to climate change 58-61, 124
201-3 Defined benefit plan obligations and other retirement plans 168-173
GRI 205:
Anti-corruption 2016
205-1 Operations assessed for risks related to corruption 55, 63
205-2 Communication and training about anti-corruption policies and procedures 55
205-3 Confirmed incidents of corruption and actions taken 55
GRI 206: Anti-competitive Behavior 2016 206-1 Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices 55
GRI 207:
Tax 2019
207-1 Approach to tax 137-138, 148-150, Synthomer Group Policies
207-2 Tax governance, control, and risk management 137-138
207-3 Stakeholder engagement and management of concerns related to tax 76-86
GRI 302:
Energy 2016
302-1 Energy consumption within the organisation 191, Sustainability Insights
302-3 Energy intensity 191
302-4 Reduction of energy consumption 42
GRI 303:
Water and Effluents 2018
303-1 Interactions with water as a shared resource 31, 42, Sustainability Insights
303-3 Water withdrawal 42, 192
303-5 Water consumption 193
GRI 305:
Emissions 2016
305-1 Direct (Scope 1) GHG emissions 42, 191, Sustainability Insights
305-2 Energy indirect (Scope 2) GHG emissions 42, 191, Sustainability Insights
305-3 Other indirect (Scope 3) GHG emissions 42, 192, 194, Sustainability Insights
305-4 GHG emissions intensity 192, 194
305-5 Reduction of GHG emissions 42, Sustainability Insights
305-6 Emissions of ozone-depleting substances (ODS) 192
305-7 Nitrogen oxides (NO
x
), sulfur oxides (SO
x
), and other significant air emissions 192
GRI 306:
Waste 2020
306-1 Waste generation and significant waste-related impacts 42, 193, Sustainability Insights
306-2 Management of significant waste-related impacts 42
306-3 Waste generated 193
306-4 Waste diverted from disposal 193
306-5 Waste directed to disposal 193
Synthomer plc Annual Report 2024196
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
GRI content index continued
GRI standard Disclosure Location
GRI 308: Supplier Environmental Assessment 2016 308-1 New suppliers that were screened using environmental criteria Synthomer ESG Datapack
GRI 401:
Employment 2016
401-1 New employee hires and employee turnover Synthomer ESG Datapack
401-3 Parental leave 36-39
GRI 403:
Occupational Health andSafety 2018
403-1 Occupational health and safety management system 40, Sustainability Insights
403-2 Hazard identification, risk assessment, and incident investigation 40, 43, 53
403-4 Worker participation, consultation, and communication on occupational health and safety 40, 43, 53
403-5 Worker training on occupational health and safety 40, 43, 53
403-6 Promotion of worker health 37
403-8 Workers covered by an occupational health and safety management system Synthomer ESG Datapack
403-9 Work-related injuries 40, Synthomer ESG Datapack
403-10 Work-related ill health Synthomer ESG Datapack
GRI 404:
Training and Education 2016
404-1 Average hours of training per year per employee Synthomer ESG Datapack
404-2 Programs for upgrading employee skills and transition assistance programs 39
404-3 Percentage of employees receiving regular performance and career development reviews 37
GRI 405:
Diversity and Equal Opportunity 2016
405-1 Diversity of governance bodies and employees 37, 69, 97
405-2 Ratio of basic salary and remuneration of women to men 36-39
GRI 407: Freedom of Association and
CollectiveBargaining 2016
407-1 Operations and suppliers in which the right to freedom of association and
collective bargaining may be at risk
Synthomer modern
slaverystatement
GRI 408: Child Labour 2016 408-1 Operations and suppliers at significant risk for incidents of child labour Synthomer modern
slaverystatement
GRI 409: Forced or Compulsory Labour 2016 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labour Synthomer modern
slaverystatement
GRI 413: Local Communities 2016 413-1 Operations with local community engagement, impact assessments, and development programs Sustainability Insights
GRI 414: Supplier Social Assessment 2016 414-1 New suppliers that were screened using social criteria Synthomer ESG Data Pack
GRI 415: Public Policy 2016 415-1 Political contributions 118
GRI 416: Customer Health andSafety 2016 416-1 Assessment of the health and safety impacts of product and service categories Sustainability Insights
416-2 Incidents of non-compliance concerning the health and safety impacts of products and services Sustainability Insights
GRI 417:
Marketing and Labeling 2016
417-1 Requirements for product and service information and labeling Sustainability Insights
417-2 Incidents of non-compliance concerning product and service information and labeling Sustainability Insights
417-3 Incidents of non-compliance concerning marketing communications Sustainability Insights
Synthomer plc Annual Report 2024197
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Glossary of terms
AC Amortised Cost
AGM Annual General Meeting
AIMS Accident and Incident Management System
AM Acrylate Monomers
APMs Alternative Performance Measures
APO Amorphous polyolefins
AS Adhesive Solutions division
CCS Coatings & Construction Solutions division
CDP Carbon Disclosure Project
CGU Cash Generating Unit
CH
4
Methane
CO
2
Carbon Dioxide
CO
2
e Carbon Dioxide equivalent
Constant
currency
Reflects current year results for existing business translated at the prior
year’s average exchange rates, and includes the impact of acquisitions
CSRD Corporate Sustainability Reporting Directive
DE&I Diversity, equity and inclusion
DEFRA Department for Environment, Food and Rural Affairs
EBITDA EBITDA is calculated as operating profit before depreciation, amortisation
and Special Items
EMEA Europe, Middle East, Africa and Americas
EPS Earnings Per Share
ERC Executive Risk Committee
ESG Environmental, Social and Governance
FRC Financial Reporting Council
Free Cash
Flow
The movement in net debt before financing activities, foreign exchange and
the cash impact of Special Items, asset disposals and business combinations
FRS Financial Reporting Standard
FVTOCI Fair Value Through Other Comprehensive Income
FVTPL Fair Value Through Profit or Loss
GDP Gross Domestic Product
GHGs Greenhouse Gases
GJ Gigajoule
GLT Global Leadership Team
GRI Global Reporting Initiative
H&P Health & Protection business unit
HPPM Health & Protection and Performance Materials division
IFRS International Financial Reporting Standards
ISA International Standards of Auditing
ISCC PLUS International Sustainability & Carbon Certification PLUS
KPIs Key Performance Indicators
kt Kilotonne or 1,000 tonnes (metric)
LTA Lost Time Accident
LTIP Long-Term Incentive Plan
M&A Mergers and Acquisitions
MYR Malaysian Ringgits
N2O Nitrous Oxide
NBR Nitrile butadiene latex
NED Non-Executive Director
Net debt Cash and cash equivalents together with short- and long-term borrowings
n/m Not meaningful
NO
x
Nitrogen Oxides
OECD Organisation for Economic Co-operation and Development
Operating
profit
Operating profit represents profit from continuing activities before finance
costsand taxation (sometimes also known as EBIT or earnings before
interest and tax)
Operating
Cash Flow
Operating Cash Flow is defined as Total Group EBITDA plus/minus net
working capital movement less capital expenditure
OSHA Occupational Safety and Health Administration
PPE Property, Plant and Equipment
PSER Process safety event rate
PSP Performance Share Plan
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STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Glossary of terms continued
R&D Research and Development
RCF Revolving credit facility
RCR Recordable injury case rate
ROIC Return on Invested Capital, calculated as underlying operating profit after
tax divided by average invested capital at start and end of year (comprising
equity, net debt, post-retirement benefit obligations and lease liabilities)
SBR Styrene Butadiene Rubber
SDG Sustainable Development Goals
SHE Safety, Health and Environment
SHEMS Safety, Health and Environment Management System
TCFD Task Force on Climate-related Financial Disclosures
The Code The UK Corporate Governance Code
TSR Total Shareholder Return
UKEF United Kingdom Export Finance
Underlying
performance
Underlying performance represents the statutory performance of the
Groupunder IFRS, excluding Special Items
VOCs Volatile Organic Compounds
Synthomer plc Annual Report 2024199
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
2024
£m
2023
£m
2022
£m
2021
£m
2020
£m
2019
£m
Revenue 1,996.6 2,021.2 2,585.1 2,329.5 1,644.2 1,459.1
Underlying performance (a)
EBITDA (b) 149.2 139.1 265.1 522.2 259.4 177.9
Operating profit (c) 52.8 33.8 171.2 450.9 189.6 125.8
Finance costs (60.0) (64.9) (46.2) (30.8) (29.6) (9.6)
Profit before taxation (7.2) (31.1) 125.0 420.1 160.0 116.2
Basic earnings pershare (f) (2.5)p (35.1)p 152.0p 554.0p 212.9p 186.4p
Dividends pershare (f) – – – 221.0p 85.4p 29.5p
Dividend cover – – – 2.5 2.5 6.3
IFRS
Operating profit (c) (25.9) 17.7 (26.5) 308.5 58.4 110.6
Finance costs (61.4) (71.4) (21.1) (24.6) (38.1) (10.1)
Profit before taxation (87.3) (53.7) (47.6) 283.9 20.3 100.5
Basic earnings pershare (f) (44.4)p (78.5)p (51.2)p 355.8p 5.2p 158.4p
Dividends per share (f) – – – 221.0p 85.4p 29.5p
Dividend cover – – – 1.6 0.1 5.4
Net debt (d) (597.0) (499.7) (1,024.9) (114.2) (462.2) 20.7
Capital expenditure (e) 90.6 84.0 90.8 82.2 53.8 69.1
(a)TotalofcontinuinganddiscontinuedoperationsfortheGroup.
(b)Asdefinedintheaccountingpoliciesatnote2 and reconciled in note 5.
(c)Asdefinedinnote2tothefinancialstatementsonpage137.
(d) As reconciled in note 21.
(e) As disclosed on the consolidatedcashflowstatement.
(f)Dividendsandearningspersharefiguresfor2022andpriorhavebeenadjustedforthe20to1shareconsolidationandrightsissueadjustmentfactorof2.715.
Historicalfinancialsummary
Synthomer plc Annual Report 2024200
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Advisers
Registered office
Synthomer plc
Registered number 98381
Company Secretary
Anant Prakash
Bankers
Citibank
CommerzbankAG
HSBC Bank plc
JPMorgan
Santander
Goldman Sachs
Joint stockbrokers
MorganStanley&Co.andJPMorganCazenove
Registrars
Computershare Investor Services plc
Lochside House
7 Lochside Avenue
Edinburgh Park
Edinburgh
EH129DJ
Independent auditors
PricewaterhouseCoopersLLP
Chartered Accountants and Statutory Auditors London
Printed sustainably in the UK by Pureprint,
acarbonneutralcompanywithFSC
®
ChainofcustodyandanISO14001-certified
environmental management system recycling
over100%ofalldrywaste.
Edited, designed and produced by
FalconWindsor.
falconwindsor.com
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION
Synthomer plc Annual Report 2024201
