Q3 Trading Statement

RNS Number : 3239H

Croda International PLC

04 November 2008

 



4 November 2008    

Croda International Plc

Third Quarter Trading Statement

Commenting on trading for the third quarter ending 30 September 2008, Martin Flower, Chairman of Croda International Plc, said:

'I am pleased to report that the very strong trading performance seen in the first half has continued in the third quarter.

Global demand for our core products remains robust with the Personal Care and Crop Care sectors showing particularly strong growth. For the three months ended 30 September 2008, continuing sales were £246.7m (2007: £197.1m), up 25.2% versus the corresponding period last year. Continuing pre-tax profit was 73.2% higher at £24.6m (2007: £14.2m) due to the sales increase, synergies realised from the acquisition of Uniqema, favourable currency translation and a reduced interest charge.

Significant raw material inflation continued throughout the period which was fully recovered through price increases. On a constant currency basis, our average selling price per tonne increased 20.5% versus the corresponding period last year. This reflects not only price increases but also favourable mix from shedding low quality business and the higher sales value of the turnover formerly carried out by third party distributors. In addition, favourable currency translation boosted turnover by 12.7%.

Consumer Care volumes were ahead of last year but overall volumes were down as a result of our continuing strategy to shed low margin commodity business together with slight weakness in Plastics Additives and Polymer and Coatings sales which reduced Industrial Specialities volumes.


Operating margins were 1.3 percentage points higher than the corresponding period last year. The lower Industrial Specialities volumes meant that the allocation of overheads to Consumer Care was higher and this, plus the level of seasonal maintenance work undertaken in the period, had the effect of slightly reducing sequential and comparative Consumer Care operating margins. As anticipated, Industrial Speciality margins were well ahead of last year but below those seen in the first half due in part to glycerine pricing. A detailed breakdown of the third quarter's results is set out below.

Record sales in September, raw material inflation, restructuring costs and a £6.0m tax payment on the sale of Chicago combined to produce a cash outflow of £17.0m in the quarter despite reduced physical working capital and strong profits. At 30 September 2008, net debt was £364.7m with £16.0m of the year to date increase due to the effects of volatile exchange rates on the translation of our opening Euro and Dollar debt at closing exchange rates.

Whilst we recognise the uncertainty relating to global trade at present, demand remains robust in all our core markets and we are confident of making further progress, both in the fourth quarter and in 2009'

For further information please contact:

 

Mike Humphrey	Group Chief Executive	01405 860551
Sean Christie	Group Finance Director	01405 860551
Charlie Armitstead	Financial Dynamics	0207 831 3113

The company will host a conference call for analysts at 8.00am today. 

Please dial [phone] to gain access to the call.

£m		Q3			9 months
	2008	2007		2008	2007
Consumer Care	112.5	91.1		328.5	267.8
Industrial Specialities	134.2	106.0		406.9	332.2
Continuing Turnover	246.7	197.1	+25.2%	735.4	600.0	+22.6%
Consumer Care	21.6	18.1		65.9	53.8
Industrial Specialities	6.8	2.0		24.0	5.6
Continuing operating profit	28.4	20.1	+41.3%	89.9	59.4	+51.3%
Operating Margin	11.5%	10.2%		12.4%	9.9%
Interest	(3.8)	(5.9)		(12.4)	(17.4)
Continuing pre tax profit	24.6	14.2	+73.2%	77.5	42.0	+84.5%

 

Profit after tax from discontinued operations

-

2.2

2.9

7.5

 

Analysis of Q3 turnover uplift
Average selling price	+20.5%
Volume	-8.0%
Currency translation	+12.7%
Continuing turnover increase	+25.2%

 

 

END

 

 

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