REG - Croda International - First quarter 2024 sales update

Croda InternationalAnnouncement

24/04/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240424:nRSX7680La&default-theme=true

RNS Number : 7680L  Croda International PLC  24 April 2024

Press Release

24 April 2024

 

First quarter 2024 sales update

On track to meet previous Group guidance for FY24

Croda International Plc ("Croda" or the "Group") today provides an update on
its sales performance in the first quarter of 2024 (the three months ended 31
March 2024).

·      Group sales of £409m, down 10% at constant currency versus a
strong Q1 2023 comparator

·      Group sales up 8% versus Q4 2023, excluding Covid-19 lipid sales
in the previous quarter

·      Continue to expect Group FY24 adjusted PBT to be between £260m
and £300m

Steve Foots, Chief Executive Officer, said:

"Consumer Care has made an encouraging start to the year with growth across
all business units and a significant improvement in North America. Life
Sciences continues to experience more challenging market conditions,
particularly in Crop Protection. Overall, we are on track to meet our
previously stated Group guidance for the full year. We are focused on
executing our strategy, accelerating the conversion of our exciting Pharma
pipeline, and investing for the future whilst carefully monitoring costs, with
a clear set of priorities that will drive our near-term performance."

Group performance - sales down against a strong prior year comparator but improving sequentially
                               Change versus prior year                        Change versus previous quarter
                         Q124  Q123       Change     Constant currency change  Q423*             Change*

                         £m    £m                                              £m
 Consumer Care           237   237        0%         5%                        212               12%
 Life Sciences           122   171        (29)%      (26)%                     126               (3)%
 Industrial Specialties  50    69         (28)%      (24)%                     40                24%
 Group                   409   477        (14)%      (10)%                     379               8%

( )

*Life Sciences and Group Q423 sales and related % changes exclude £48m of
lipid sales for Covid-19 vaccine applications to aid comparability as no
Covid-19 lipid sales are expected in 2024. See table below for reconciliation.

 

In the first three months of 2024, Croda recorded sales of £409m, down 14% on
a reported basis or by 10% in constant currency, against a strong prior year
comparator.

Reported sales were up 8% compared with the fourth quarter of 2023 (excluding
lipid sales for Covid-19 vaccine applications in the previous quarter to aid
comparability) and overall Group results were in line with expectations.

As previously disclosed, for full year 2024 we continue to expect Group
adjusted operating margin to be two to three percentage points lower than
2023, and adjusted profit before tax to be between £260m and £300m based on
exchange rates at the time of our Full Year 2023 results announcement.

Consumer Care - encouraging first quarter led by North America

Consumer Care has made an encouraging start to the year. Reported sales were
flat versus the prior year whilst constant currency sales grew by 5%.

Sequentially, versus the previous quarter, reported sales were up by 12% from
a low base, driven by a double-digit increase in sales volumes, with growth
across all business units. In addition to continued growth in F&F and Home
Care, Beauty Actives was particularly strong, benefitting from good demand in
North America and Europe. Beauty Care, the largest business unit within
Consumer Care, also delivered an encouraging performance with a double-digit
percentage increase in sales including growth in all regions, led by the
Americas.

Life Sciences - market environment remains more challenging

Reported sales in Life Sciences were 29% lower than the prior year principally
reflecting the very strong Q1 prior year performance in Crop Protection before
destocking began in the second quarter of 2023. Constant currency sales fell
by 26%.

Reported sales were down 3% versus the fourth quarter of 2023 (excluding lipid
sales for Covid-19 vaccine applications in the previous quarter). This
comprised flat sales in Crop Protection, lower sales in Seed Enhancement -
where sales are seasonally second half weighted, and a small reduction in
Pharma - where some of the challenges that faced pharmaceutical markets in
2023, such as Covid-19 normalisation and destocking in consumer health,
continued into the first quarter of 2024. Sales of delivery systems for
Nucleic Acid and Protein-based drugs, both strategic focus areas for Croda,
have continued to grow year-on-year, and we are bringing new drug delivery
technologies to market as planned.

Industrial Specialities - sequential improvement in sales driven by volume and mix

Reported sales in Industrial Specialties fell by 28% with both volumes and
price/mix lower than the first quarter of 2023, when market conditions were
more favourable before starting to deteriorate in quarter two. Constant
currency sales fell by 24%.

Sequentially, reported sales in Industrial Specialties improved by 24% versus
the previous quarter with improving volumes and positive mix, most notably in
EMEA.

Further information

Croda is hosting a short conference call for analysts and investors at 8am BST
this morning. Please register in advance at: www.croda.com/investors
(http://www.croda.com/investors) . Our Annual General Meeting (AGM) is taking
place at 12 noon today at the Pavilions, Harrogate, North Yorkshire, HG2 8QZ,
UK.

Croda will report half year 2024 results on 30 July 2024 and expects to
provide an update on third quarter 2024 sales performance on 11 November
2024.

For enquiries contact:

 Investors:  David Bishop, Croda        +44 7823 874428
             Reece De Gruchy, Croda     +44 7826 548908
 Press:      Charlie Armitstead, Teneo  +44 7703 330269

 
2023 sales
                         Q1 2023  Q2 2023  Q3 2023  Q4 2023  Q4 2023 ex CV19 lipids*  FY 2023  FY 2023 ex CV19 lipids*

 Quarterly sales (£m)
 Consumer Care           236.8    218.8    218.2    212.2    212.2                    886.0    886.0
 Life Sciences           170.8    132.4    125.0    174.1    126.1                    602.3    554.3
 Industrial Specialties  69.1     53.0     43.8     40.3     40.3                     206.2    206.2
 Group                   476.7    404.2    387.0    426.6    378.6                    1,694.5  1,646.5

( )

*Life Sciences and Group Q423 sales exclude £48m of lipid sales for Covid-19
vaccine applications to aid comparability as no Covid-19 lipid sales are
expected in 2024.

 
Currency translation

The US Dollar and the Euro together represent approximately 65% of the Group's
currency translation exposure. A one cent per annum movement in either the
Dollar or the Euro has an average annual profit before tax impact of
approximately £1m.

Constant currency results

Constant currency results reflect current year performance for existing
business translated at the prior year's average exchange rates. For constant
currency sales, local currency sales are translated into the most relevant
functional currency of the destination country of sale (for example, sales in
Latin America are primarily made in US Dollars, which is therefore used as the
functional currency). Sales in functional currency are then translated into
Sterling using the prior year's average rates for the corresponding period.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDIJMPTMTJTBTI