AGM Information • Mar 21, 2013
AGM Information
Open in ViewerOpens in native device viewer
If you are in any doubt as to any aspect of the proposals referred to in this document, or as to the action you should take, you should seek your own advice from a stockbroker, solicitor, accountant or other professional adviser.
If you have sold or otherwise transferred all of your shares in the Company, please pass this document together with the accompanying document(s) to the purchaser or transferee, or to the person who arranged the sale or transfer so they can pass these documents to the person who now holds the shares.
(registered in England & Wales no 3299608) 10 Albemarle Street London W1S 4HH
21 March 2013
Dear Shareholder
I am writing to give you notice of the Company's Annual General Meeting ("AGM") that is to be held at The Royal Institution of Great Britain, 21 Albemarle Street, London W1S 4BS on Thursday 25 April 2013 at 11.00 a.m.
The following items are also included in this document:
Shareholders who have elected to receive printed copies of documents that we provide to shareholders will also find enclosed a printed copy of the 2012 Annual Report and Accounts. A copy of that document can be accessed through the Company's website at: www.elementisplc.com/financial-information/reports-&-presentations.
Website communication has helped the Company not only to reduce printing and mailing costs but also to reduce the impact of those activities on the environment. If you wish to review all or specific sections of the 2012 Annual Report and Accounts, you will find the interactive version on our website particularly useful and easy to use. Alternatively, if you wish for a printed copy to be sent to you in full, then please request this from the Company Secretary at the above address.
As an alternative to submitting a proxy form by post, you may wish to vote electronically by visiting our registrar's website at www.sharevote.co.uk. Once you have selected Elementisfrom the list, you will be asked to enter a Voting ID, Task ID and Shareholder Reference Number. These are printed in this order on the enclosed personalised proxy form. To be valid, all electronic voting instructions must be received by 11.00 a.m. on 23 April 2013. Please read the notesto the Notice of Meeting asthese set out other rights ofshareholders and further requirements which you should check, to ensure your proxy vote will be valid.
Yours sincerely
Robert Beeston Chairman
• Robust earnings and strong cash flow
• Net cash position increased to \$44.0 million
Final ordinary dividend increased by 14 per cent, full year up 11 per cent
First payment announced under special dividend programme, proposing to distribute 50 per cent of year end net cash
| Change | ||
|---|---|---|
| +5% | ||
| \$141.2m | \$134.5m* | +5% |
| 23.3c | +12% | |
| \$44.0m | \$26.2m | +68% |
| 23.7c | 27.8c** | |
| +5% | ||
| 5.32c | 4.66c | +14% |
| 7.77c | 7.00c | +11% |
| 4.79c | – | |
| 2012 \$757.0m \$143.9m \$107.1m 2.45c |
2011 \$760.5m \$137.1m 20.8c \$124.1m** 2.34c |
* before exceptional items, all of which relate to 2011
**includes one-time gain from recovery of funds from EU commission
I am pleased to report another year of excellent progress at Elementis. As has been widely documented, the economic environment remained challenging in 2012 and continues to test the resilience of our strategy and business model. It is therefore gratifying to report that we have yet again delivered improvements in earnings and operating margin in the year.
The well invested and cash generative nature of our businesses means that we have been able to make further value added investments and yet still increase the amount of net cash on our balance sheet in 2012 by \$17.8 million, to a total of \$44.0 million at the end of the year. As a result the Board is recommending the first distribution under the recently announced special dividend programme.
The Group has continued to benefit from its strategy of investing in Specialty Products, where opportunities are plentiful and prospective returns are high, funding this investment through the positive cash flow generated by this business and the stable earnings and cash flow from the Chromium business. The period has seen several exciting investmentsin Specialty Products, and already in 2013 we have announced the acquisition of Hi-Mar, further expanding our product offering and technical service in the area of defoamers. These investments will further enhance the growth prospects and resilience of both Specialty Products and the Group as a whole.
Group revenues in 2012 were \$757.0 million compared to \$760.5 million in the previous year, with Specialty Products and Chromium both showing revenue growth, while the Surfactants business continued to reduce revenue in low margin activities in line with its strategy. Group operating profit* increased by 5 per cent to \$143.9 million, or 7 per cent on a constant currency basis, and operating margin* increased from 18.0 per cent in 2011 to 19.0 per cent in the year. Diluted earnings per share* improved by 12 per cent to 23.3 cents per share.
The Group continues to be in a robust financial position and has a balance sheet that provides a strong platform to fund future growth. During the year a new funding plan was agreed with the trustees of the Group's UK pension plan that will finance the agreed funding deficit over the next six years. Under the new plan the Group will make affordable contributionsthatstrike the right balance between meeting our commitments under the plan, while supporting our growth, and providing appropriate returns to our shareholders and otherstakeholders. Under IAS 19 the total deficit in the Group's retirement plans at the end of 2012 was \$136.0 million, compared to \$94.8 million in the previous year. This increase is largely due to decreases in real bond yields during the year.
The Board is recommending a final dividend of 5.32 cents (2011: 4.66 cents) per share which will be paid on 31 May 2013 in pounds sterling at an exchange rate of £1=\$1.5266 (equivalent to a sterling amount of 3.4849 pence per share), to shareholders on the register on 3 May 2013. This brings the total ordinary dividend to shareholders for the year to 7.77 cents (2011: 7.00 cents), representing an increase of 11 per cent over the previous year. Going forward the Board intends to maintain a progressive ordinary dividend policy as the Group's dollar earnings and cash flow permit.
Following a review of the Group's capital in the year the Board announced that it intended to institute a special dividend programme to provide shareholders with an enhanced return, in recognition of the strong cash generative nature of the Group. Under this programme, at any year end when the Group is in a net cash position and there are no immediate investment plans for that cash, the Board will recommend an additional special dividend of up to 50 per cent of the net cash
amount. The Board is confident in the Group's ability to continue to fund growth investments, similar to those made in 2012, from internally generated cash flow. The Board has therefore concluded that it would be appropriate to distribute the full 50 per cent of the net cash balance at the end of 2012 as a special dividend. The amount of this special dividend will therefore be \$22 million, or 4.79 cents per share (equivalent to a sterling amount of 3.1377 pence per share), and will be paid under the same terms and exchange rate as the ordinary dividend, bringing the combined dividend for the full year to 12.56 cents per share.
Our performance in this important area of our business continues to be of a high industry standard and showed an improvement over the previous year. Nevertheless, we remain extremely vigilant in monitoring and continuously improving our processes and activities that impact upon the safety of our employees and the environment.
Your Board remains committed to maintaining high standards of corporate governance and is satisfied that the Company has complied fully with all of the relevant provisions of the UK Corporate Governance Code (June 2010 version) ("CGC") throughout the financial year ended 2012. In my introduction to the corporate governance report for 2012, I set out how your Board has applied the main principles in the CGC relating to the role and effectiveness of the Board.
The Board welcomes the changes that have been made to the UK Corporate Governance Code (September 2012 version) and is confident that the Company will comply fully with these new provisions during 2013.
As previously reported, a recruitment process is underway that should lead to changes being made to the Board during the course of 2013. Two additional directors will be appointed to replace Chris Girling and Kevin Matthews, who will be retiring towards the end of the year. Both individuals have served as Non-executive directors since 2005. Chris Girling is Chairman of the Audit Committee and it is planned that thisrole will be taken over by one of the two new appointees after a period of induction and handover. Kevin Matthews is Chairman of the Remuneration Committee and he will be succeeded in this role by current Board member Andrew Christie. The Board is mindful of the benefits of gender diversity on boards and hastaken these factorsinto consideration in the recruitment process. All Board changes will be announced at the appropriate time.
Our progress and successes are only possible through the significant efforts and dedication of our employees around the world. I would therefore like to thank and congratulate them on behalf of the Board for yet another year of notable achievements.
The resilient performance demonstrated by the Group in 2012, combined with new investmentsin Specialty Products, are further evidence that Elementis is adopting the right strategy to drive profitable growth and create value for shareholders and other stakeholders. The Board istherefore confident that the Group can continue to make progressin the medium term.
Robert Beeston Chairman 26 February 2013
The Notice of Meeting appears on pages 7 to 9. The following information provides additional background information to several of the resolutions proposed.
Two resolutions are being proposed at the AGM in respect of dividends being recommended by the directors. The first is in respect of the final dividend for 2012 and the second, the payment of a special dividend for 2012. Full details of the final and special dividends are set out in the Chairman's statement on page 3.
In accordance with the provisions of the UK Corporate Governance Code concerning the annual re-election of all directors of FTSE 350 companies, all the directors will be retiring at the AGM and offer themselves for re-election by shareholders.
During 2012, the Chairman was re-appointed for a third three year term. The Board and the Nomination Committee have discussed the Board's succession plans and all non-executives directors, including the Chairman, have indicated their willingness to be re-appointed. Following these discussions and its annual performance evaluation, the Board is satisfied that all our directors, both executives and non-executives, contribute effectively and demonstrate appropriate commitment to their role and, therefore, shareholders are asked to support their re-election at the AGM.
The following biographical information on each director is provided to shareholders for information:
Robert Beeston was appointed non-executive Chairman of Elementis and Chairman of the Nomination Committee in September 2006. He was non-executive chairman of CooksonGroup plc from April 2003 to May 2010 and a non-executive director of D S Smith plc between December 2000 and December 2010, where he was the senior independent director and chairman of the remuneration committee from 2003 to 2009. From 1992 until 2002 he was chief executive officer of FKI plc. He spent 18 years with Dowty Group before joining John Brown PlasticsMachinery (UK) Ltd as managing director. In 1985, he was appointed managing director of BTRValveGroup, a position he held for six years before joining FKI plc.
David Dutro was appointed Group Chief Executive in January 2007. He joined ElementisinNovember 1998 as President of Elementis Pigmentsthen became President and ChiefOperatingOfficer of Elementis Worldwide in October 2005. He was vice president and general manager of Universal Foods'Dairy and Food Ingredient businesses (now Sensient Technologies Corp), and also spent time with ICI in their colours, polymer additives and surfactants businesses. David Dutro was born and educated in the US and holds a Bachelor of Science degree in marketing.
Brian Taylorson was appointed Finance Director in April 2002. Before joining Elementis he was head of European chemicals M&A group at KPMGCorporate Finance. He joined KPMGin 2000 from theDow Chemical Company where he held a number of positions in finance over a period of 17 years. He holds an MA from Cambridge University, is a member of the Institute of Chartered Accountants in England and Wales and a member of the Association of Corporate Treasurers. He was a non-executive director of Fiberweb plc between September 2006 and August 2012.
Ian Brindle was appointed a non-executive director and Chairman of the Audit Committee in June 2005. He retired as Chairman of the Audit Committee in April 2008 and was appointed Senior Independent Director. He wassenior partner of PriceWaterhouse from 1991 to 1998 andUK chairman of PricewaterhouseCoopers until 2001. He was also a member of the Accounting Standards Board between 1992 and 2001 and the deputy chairman of the Financial Reporting Review Panel between 2001 and 2008. He issenior independent director and chairman of the audit committee of Spirent Communications plc, a non-executive director of F&C Asset Management plc and non-executive chairman of Sherborne Investors (Guernsey) A Limited and Sherborne Investors (Guernsey) B Limited. From October 2003 to June 2012, he was a non-executive director of 4imprint Group plc where he was also the senior independent director.
Andrew Christie was appointed a non-executive director in August 2008 and has over 25 years of investment banking and international corporate finance experience. He is a partner of Smith Square Partners LLP, a corporate finance advisory firm, and before that was, untilMarch 2008, aUK managing director in the European Investment Banking Group at Credit Suisse. In his prior role at Credit Suisse, he was head of Investment Banking, Asia Pacific, based inHong Kong and, before that, held the same position with Barclays de Zoete Wedd. He was previously chairman and non-executive director of ArkTherapeuticsGroup plc and holds an MBA and a Bachelor of Science degree in engineering.
Chris Girling was appointed a non-executive director in April 2005 and Chairman of the Audit Committee in April 2008. He was group finance director of Carillion plc, a construction and support service group, from 1999 to 2007, and previousto that he was finance director ofVosper Thornycroft plc for ten years. He holds an MBA and is a Fellow of the Institute of Chartered Accountants in England and Wales. He is a nonexecutive director of KellerGroup plc, WorkspaceGroup plc and ARCO Limited, and chairman of the board of trustees of the Slaughter and May pension scheme.
Kevin Matthews was appointed a non-executive director in February 2005 and Chairman of the Remuneration Committee in April 2008. He is chief executive officer of Isogenica Limited, a private biotechnology business based in theUK and established in 2000. Prior to that, he was CEO of Oxonica plc, a UK based nanotechnology company, a role he held from April 2001 to September 2009, and previous to that he held roles in Rhodia Consumer Specialties Limited, Albright & Wilson UK Limited and ICI Chemicals and Polymers. He is a non-executive director of Cellectricon AB, a Swedish private biotechnology business, and holds aD.Phil in chemistry.
This resolution will extend the general authority of the directors to allot shares until the Company's next AGM or, if earlier, 30 June 2014. The authority will be in respect of shares with an aggregate nominal value of £7,559,534 equal to one third of the Company's current issued share capital as at 26 February 2013, the latest practicable date prior to the printing of this document.
This special resolution is to approve the adoption of new Articles of Association (the "New Articles"). The directors are recommending changes to the existing Articles of Association of the Company (the "Articles")to take into account andreflect updatesin corporate governancebestpractice that have takenplace since theArticleswere adoptedatthe 2009AGM. Itisproposedtomake these changesby adopting the New Articles in place of the existing Articles rather than amending the text of the existing Articles, which would require the full text of all amendments to be set out in the Notice of Meeting. However, the full text of the amendments will be available for inspection as explained below.
The main changes are summarised below in this document on page 6.
Other changes, which are either minor, technical, drafting or clarifying changes, have not been highlighted below.
This special resolution, if renewed, will allow the Company to call general meetings other than the AGM, at 14 clear days' notice for the purposes of The Companies (Shareholders'Rights) Regulations 2009, provided that electronic voting facilities have been put in place, as would be the case with Elementis. The reduction in notice period to 14 days would be ofsignificant advantage to theCompany shoulditrequire to seek shareholder approval on any matter. However, the shorter notice period of between 15 and 20 days would not be routine but used only for general meetings if the Board considers that the flexibility is merited by the business of the meeting and the circumstances surrounding thebusiness, orto keepaperiodof uncertainty aboutthe future ofthe Company to a minimum. Examples of when it might be appropriate to call a general meeting at 14 days' notice include when emergency capital raising proposals or other price sensitive transactions are being put to shareholders for approval.
This special resolution will renew the disapplication of statutory preemption rights in relation to the Company's allotment for cash of its own shares pursuant to Resolution 14, or in relation to the Company's sale of its own shares held in treasury, and shall expire at the conclusion of the next AGM of the Company or on 30 June 2014, whichever is earlier. The disapplication will permit the directors to allot shares for cash pursuant to Resolution 14, or to sell treasury shares, without first offering them to all existing shareholders pursuant to their statutory pre-emption rights under the Companies Act 2006. Any such allotments or sales must be pursuant to a rights issue or an open offer or otherwise be limited to shares with an aggregate nominal value not exceeding that of 5 per cent of all the ordinary shares in issue as at 26 February 2013 (being shares to an aggregate nominal value of £1,133,930), the latest practicable date prior to the printing of this document.
The Company confirms that it will not, under the authority to be granted in Resolutions 14 and 17, allot shares up to more than 7.5 per cent of the Company's issued capital in the preceding three year period.
ThisspecialresolutionwillrenewtheCompany's authority tomakemarket purchases of its ordinary shares on the London Stock Exchange untilthe Company's next AGM or, if earlier, until 30 June 2014. The directors have no plans at present to exercise such authority and, in any event, would only do so where they believe such purchases would result in an increase in earnings per share and would be in the best interests of shareholders generally. The authority will allow the Company to purchase up to 45,357,205 ordinary shares, representing 10 per cent of the Company's issued share capital as at 26 February 2013, the latest practicable date prior to the printing of this document. The maximum price at which any such purchase may be made is equal to 105 per cent of the average of themiddlemarketquotationsfor a share astaken fromthe London Stock Exchange's Daily Official List for the five business days preceding the date of purchase.
The authority, where it is renewed, would be for the purchase of the fixed number of shares set out in this Resolution 18, between the date the resolution is passed and until the Company's next AGM or, if earlier, until 30 June 2014. Were the Company within the period described to cancel the shares so purchased, transfer or dispose of them, in any other way, the limits of the authority, in terms of the number of shares authorised to be purchased under Resolution 18, would not be adjusted in any way so as to increase the number of shares that may be purchased by the Company under this resolution.
The Company will be able to hold shares purchased under this authority in treasury with a view to selling them later on, rather than cancelling them. This ability will provide the Company with additional flexibility in the management of its capital base. For so long as any such shares are held in treasury no dividends will be paid on them and no voting rights will attach to them. Any shares purchased by the Company under this authority that are not held in treasury will be cancelled. Currently the directors have no plans for holding any such shares in treasury instead of cancelling them, or for cancelling any of them instead of holding them in treasury.
The number of unissued shares that were subject to subscription options as at 26 February 2013 was approximately 11,100,000. This equals, in number, 2.45 per cent of the Company's issued shares at that date. If the proposed share purchase authority were to be exercised in full, those 11,100,000 shares would represent 2.72 per cent of the issued shares as reduced by the share purchases. As at 26 February 2013, the latest practicable date prior to the printing of this document, the Company was authorisedtomakemarketpurchases of upto 44,994,962 ordinary shares pursuant to an ordinary resolution passed at the 2012 AGM on substantially the same terms as those set out in Resolution 18.
The directors consider that all of the resolutions to be put to the meeting are in the best interests of the Company and its shareholders. Your Board will be voting in favour of them and unanimously recommends that you do so as well.
The following documents will be available for inspection from the date of this Notice of Meeting during normal business hours on any weekday (Saturdays excepted) until 25April 2013 attheCompany's registered office:
These documents will also be available for inspection at The Royal Institution of Great Britain, 21 Albemarle Street, London W1S 4BS for not less than 15 minutes prior to and during the AGM.
This summary explains the principal changes from the existing Articles of Association to the proposed new Articles of Association. The proposed changes reflect updates in corporate governance best practice, as well as some minor, technical, drafting or clarifying changes.
In particular, the proposed changes relate to:
NOTICE IS HEREBY GIVEN that the Sixteenth ANNUAL GENERAL MEETING of the Company will be held at The Royal Institution of Great Britain, 21 Albemarle Street, London W1S 4BS on Thursday 25 April 2013 at 11.00 a.m. for the following purposes:
To consider and, if thought fit, pass the following resolutions of which Resolutions 13 and 14 will be proposed as ordinary resolutions and Resolutions 15 to 18 will be proposed as special resolutions.
That:
(a) the power conferred by Article 4.4 of the Company's Articles of Association be renewed and so that for this purpose the Section 561 amount under the 2006 Act will be £1,133,930 and the prescribed period will be the period from the date this resolution is passed and the earlier of the date of the next Annual General Meeting or 30 June 2014;
(b) such power shall extend to the sale of treasury shares (within the meaning of Section 724 of the 2006 Act) for cash as if in respect of any such sale the words "pursuant to the authority conferred by Article 4.2"were omitted from the second line of Article 4.4; and
(c) for the purpose of such power the reference in Article 4.4 (a) to "all holders (at a date selected by the Board) of issued Ordinary Shares (as nearly as practicable) in proportion to the number of Ordinary Shares respectively held by them" shall be deemed to exclude the Company in respect of any treasury shares held by it.
(a) the maximum number of Ordinary Shares hereby authorised to be purchased is 45,357,205;
(b) the minimum price which may be paid for such shares is 5 pence pershare exclusive of expenses;
(c) the maximum price, exclusive of expenses, which may be paid for each such share is an amount equal to 105 per cent of the average of the market valuesforsuch share as derived from the Daily Official List of the London Stock Exchange for the five business days immediately preceding the day on which the share is contracted to be purchased;
(d) unless previously renewed, varied or revoked, the authority hereby conferred shall expire at the conclusion of the next Annual General Meeting of the Company or 30 June 2014, if earlier; and
(e) the Company may make a contract to purchase its own shares under the authority hereby conferred prior to the expiry of such authority, which will or may be executed wholly or partly after the expiry ofsuch authority and may make a purchase of its own shares in pursuance of any such contract.
By Order of the Board
Wai Wong Company Secretary 21 March 2013
Registered office: 10 Albemarle Street London W1S 4HH
Any corporation which is a member may appoint one or more corporate representatives who may exercise on its behalf all of its rights as a member provided that they do not do so in relation to the same shares.
Any or all joint holders of shares, registered on the Register of Members at the Specified Time, may attend the AGM, although only one holder may vote in person or by proxy. The vote or proxy appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of joint holders appear in the Company's Register of Members.
Shareholders wishing to appoint a proxy and register their proxy votes electronically should visit the website, www.sharevote.co.uk. The on-screen instructions will give details on how to appoint a proxy and submit proxy voting instructions. Electronic proxy appointments and voting instructions must be received by no later than 48 hours before the time of the meeting (or adjourned meeting) in order to be valid. Shareholders may not use any other electronic address or telephone number, whether found on this circular and Notice of Meeting, or in the Annual Report or on any Proxy Form or the Company's website, for the purposes of submitting voting instructions or appointing proxies. The only electronic address accepted for this stated purpose is the one at the www.sharevote. co.uk website.
If two or more valid but differing appointments of a proxy are received in respect of the same share for use at the same meeting, the one which is last received (regardless of its date or the date of signature)shall be treated asreplacing and revoking the others as regards that share. If the Company is unable to determine which was last received, none of them shall be treated as valid in respect of that share.
The Group operates a website which can be found at www.elementisplc.com. This site is frequently updated to provide shareholders with information about the Group and each of its operating divisions. In particular the Group's pressreleases and announcements can be found on the site together with copies of the Group's accounts.
Enquiries concerning shares or shareholdings, such as the loss of a share certificate, consolidation of share certificates, amalgamation of holdings or dividend payments, should be made to the Company's registrars:
Aspect House Spencer Road Lancing West Sussex BN99 6DA
Tel: 0871 384 2379 or +44 (0) 121 415 7043
Fax: 0871 384 2100 or +44 (0) 190 83 3113
Callsto 0871 numbers cost 8 pence per minute plus network extras. Lines are open 8.30 a.m. to 5.30 p.m., Monday to Friday.
In any correspondence with the registrars, please refer to Elementis plc and state clearly the registered name and address of the shareholder. Please notify the registrars promptly of any change of address.
It is in the best interests of shareholders and the Company for dividendsto be paid directly into bank or building society accounts. Any shareholder who wishes to receive dividends in this way should contact the Company's registrars to obtain a dividend mandate form.
For shareholders with hearing difficulties:
Callers inside the UK telephone: 0871 384 2255
Callers outside the UK telephone: +44 (0) 121 415 7028
Equiniti provide a range of shareholders' services online. The portfolio service provides access to information on investments including balance movements, indicative share prices and information on recent dividends and also enables address and mandate details to be amended online. For further information and practical help on transferring shares or updating your details, please visit www.shareview.co.uk. The share dealing service enables shares to be sold by UK shareholders by telephone or over the internet. For telephone sales please call 08456 037037 between 8.30 a.m. and 4.30 p.m. and for internet sales please visit www.shareview.co.uk/dealing
Wai Wong
10 Albemarle Street London W1S 4HH, UK
3299608
Auditors KPMG Audit plc
UBS Investment Bank N+1 Singer
| 26 February 2013 | Preliminary announcement of final resultsfor the year ended 31 December 2012 | |
|---|---|---|
| 25 April 2013 | Annual General Meeting and First Interim Management Statement | |
| 1 May 2013 | Ex-dividend date for final and special dividends for 2012 payable on ordinary shares | |
| 3 May 2013 | Record date for final and special dividends for 2012 payable on ordinary shares | |
| 31 May 2013 | Payment of final and special dividends for 2012 on ordinary shares | |
| 30 July 2013 | Interim results announcement for the half year ending 30 June 2013 | |
| 4 September 2013* | Ex-dividend date for interim dividend for 2013 payable on ordinary shares | |
| 6 September 2013* | Record date for interim dividend for 2013 payable on ordinary shares | |
| 4 October 2013* | Payment of interim dividend for 2013 on ordinary shares | |
| 31 October 2013* | Second Interim Management Statement | |
| 25 February 2014* | Preliminary announcement of final resultsfor the year ending 31 December 2013 |
* provisional date
10 Albemarle Street London W1S 4HH, UK
Tel: +44 (0) 20 7408 9300 Fax: +44 (0) 20 7493 2194 www.elementisplc.com
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.