Synthomer : Annual Report 2022

2 Who we are and what we do

We are a world-leading supplier of high-performance speciality chemical products, and our strategy and business structure enable us to harness our focus on sustainability and innovation to serve customers in highly attractive end markets.

27 Review of the year

We describe the actions we have taken to strengthen our balance sheet and refresh our strategy, and we report performance for the five divisions

in place during 2022, prior to our reorganisation on 1 January 2023.

39 Synthomer and sustainability

Sustainability is one of the critical enablers of our strategy, and our Vision 2030 roadmap sets out how we are delivering on our commitments on environmental, social and governance (ESG) issues.

STRATEGIC REPORT - Contents

91

1. Our Board of Directors

1. Our Executive Committee

1. Introduction from the Chair
2. Our governance structure

1. The Board's year

105 Stakeholder engagement

(s.172 compliance)

108 Audit Committee report

1. Nomination Committee report

1. Compliance with the Code

1. Directors' remuneration report:

1. - Introduction from the Chair

1. - Remuneration at a glance

1. - Proposed new remuneration policy

1. - Annual report on remuneration

1. Directors' report

1. Statement of Directors' responsibilities

153

Group financial statements

1. Independent auditors' report

1. Consolidated income statement

162 Consolidated statement of comprehensive income

1. Consolidated statement of changes in equity
2. Consolidated balance sheet
3. Consolidated cash flow statement

1. Reconciliation of net cash flow from operating activities to movement in net debt
2. Notes to the consolidated financial statements

Company financial statements

1. Company statement of financial position
2. Company statement of changes in equity
3. Notes to the Company financial statements

211

212 Environmental performance summary

216 Global Reporting Initiative (GRI) content index

1. Glossary of terms
2. Historical financial summary
3. Advisers

GOVERNANCE REPORT

FINANCIAL STATEMENTS

In 2022 we:

Refreshed our strategy to strengthen our focus on specialist solutions for attractive end markets, and introduced a new market- focused divisional structure from 1 January 2023.

Strategically managed our portfolio, integrating our new adhesive resins business and divesting our non-core laminates, films and coated fabrics businesses.

Took decisive action to strengthen our balance sheet and reduce our leverage, focusing on capital allocation and costs in light of the challenging trading environment.

STRATEGIC REPORT - Who we are and what we do GOVERNANCE REPORT

Held the London Stock Exchange Green Economy Mark, awarded to companies who earn more than 50% of their revenue from products and services that contribute to environmental objectives.

Were upgraded from 'A' to 'AA' in the latest assessment by MSCI, putting us in the top quartile for ESG performance in the Specialty Chemicals sector.

Further developed our Vision 2030 sustainability roadmap and accelerated our decarbonisation plans, including through alignment with science-based targets.

FINANCIAL STATEMENTS

1EBITDA is calculated as operating profit before depreciation, amortisation and Special Items.

Underlying performance statement

The Group's performance management uses Underlying performance to plan for, control and assess the performance of the Group. Underlying performance differs from the statutory IFRS performance as it excludes the effect of Special Items, which are detailed in note 4 to the financial statements. The Board's view is that Underlying performance provides additional clarity for the Group's investors and stakeholders and so it is the primary focus of the Group's narrative reporting. Where appropriate, IFRS performance inclusive of Special Items is also described. References to 'unit margin' and 'margin' are used in the commentary on Underlying performance.

Unit margin (or margin) is calculated on selling price less variable raw material and logistics costs.

Free Cash Flow is the movement in net debt before financing activities, foreign exchange and the cash impact of Special Items, asset disposals and business combinations.

All statistics shown on page 2 reflect the Total Group during 2022.

OTHER INFORMATION