Croda International Plc · LSE:CRDA
Croda International — Investor Day (October 2020)
72 slides from Croda International's investor day presentation, Oct 20, 2020
Slide 1: Croda International Plc – A leader in Sustainability
Croda International Plc – A leader in Sustainability 20 October 2020 Investor seminar
Slide 2: Cautionary statement
Cautionary statement This presentation is intended to focus on matters which are relevant to the interests of shareholders in the Company. The purpose of the review is to assist shareholders in assessing the strategies adopted and performance delivered by the Company and the potential for those stra
Slide 3: About Croda – the markets we serve
About Croda – the markets we serve Beauty Actives Beauty Effects Beauty Formulation Personal Care Health Care Crop Protection Seed Enhancement Life Sciences Energy Technologies Smart Materials Home, Fabric and Water Performance Technologies 3
Slide 4: Agenda
Agenda Part one: 1400 – 1530 BST Part two: 1530 – 1700 BST Croda’s Sustainability Strategy Delivering Sustainability to our customers • The Sustainability challenge • Customer perspectives • Our Purpose • Opportunities for Croda • Our Sustainability strategy – Consumer markets • Delivering our Susta
Slide 5: Meet the team
Meet the team Meet the Croda team Introducing our guests Steve Foots Maarten Heybroek Jennifer Hart Nick Challoner Aris Vrettos Kyra Constanze Pauly CEO Sector President Managing Director, Sector President Director, Cambridge Institute of Head of Strategy & Impact Beauty Effects Sustainability Leade
Slide 6: Our Purpose
Our Purpose Steve Foots – Chief Executive Officer 6
Slide 7: Strategy: Innovation + Sustainability = Growth
Strategy: Innovation + Sustainability = Growth Our Purpose Smart Science to Improve Lives TM The lifeblood of our business, we seek to increase the quantity of NPPs included and formulated Innovation in our customers’ products Aligning our business with our Purpose and accelerating Sustainability Ou
Slide 8: Embedding our Purpose through our actions
Embedding our Purpose through our actions Our Purpose – Smart Science to Improve LivesTM Living our Purpose in COVID-19 COVID-19 1. Health and 2. 3. Planning priorities: Safety Performance ahead No job losses, furlough or Flexible salary payment terms Employees Customers and reductions suppliers Fin
Slide 9: Our Sustainability Commitment
Our Sustainability Commitment Our 2030 Commitment By 2030 we will be Climate, Land and People Positive As part of this Commitment, we will become the most sustainable supplier of innovative ingredients Our priority SDGs 9
Slide 10: Embedding Sustainability through delivering our Commitment
Embedding Sustainability through delivering our Commitment • Climate Positive • People Positive – Sustainable products that – Saving lives in Health Care save customers carbon – Improving lives of employees, – Decarbonising Croda partners and communities – Transition to bio-based – Increasing divers
Slide 11: Embedding Sustainability through acquisition and partnership
Embedding Sustainability through acquisition and partnership Biosector 2012 Over £500m of investment 2020 IRB plant stem cell cultures Incotec seed coatings Biosector vaccine adjuvants 100% bio-based surfactants Avanti lipid nanoparticles 40% of new Beauty Active High single digit % 25% growth H1 20
Slide 12: Our Sustainability strategy
Our Sustainability strategy Stuart Arnott – President, Sustainability 12
Slide 13: The United Nations Sustainable Development Goals (SDGs)
The United Nations Sustainable Development Goals (SDGs) 13
Slide 14: Climate, Land and People Positive
Climate, Land and People Positive 14
Slide 15: Aligning our strategy with the UN SDGs
Aligning our strategy with the UN SDGs 15
Slide 16: Aligning our strategy with the UN SDGs
Aligning our strategy with the UN SDGs Fundamentals data pack available 16
Slide 17: A sense of urgency
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Slide 18: A restorative strategy
A restorative strategy Climate Land People By 2030 Positive Positive Positive Climate, Land Enable more land Enable more Apply our innovations & People Positive to be saved than carbon to be saved to increase our positive we use to grow our than we emit impact on society bio-based materials Innovati
Slide 19: A strategy built by our people
A strategy built by our people Significant employee engagement on our Purpose and Commitment Board Draft Implementation External Commitment discussion Purpose team created testing launched CISL SDGs 2030 KPIs Board sign- Committee engagement agreed devised off established 2018 2020 Actions speak lou
Slide 20: By 2030 we will be Climate Positive
By 2030 we will be Climate Positive We will continue to reduce our carbon footprint and increase our use of bio-based raw materials, whilst the benefits in use of our ingredients will enable more carbon to be saved than we emit through our operations and supply chain Reducing emissions Sustainable i
Slide 21: By 2030 we will be Land Positive
By 2030 we will be Land Positive Our products will enable more land to be saved than is used to grow our bio-based raw materials. Our innovation will help customers to mitigate the impact of climate change and land degradation, increasing the availability of land suitable for growing crops Land use
Slide 22: By 2030 we will be People Positive
By 2030 we will be People Positive We will apply our innovation to increase our positive impact on society. We are improving the lives of our own employees and people around the world by developing ingredients to improve health and wellbeing as well as encouraging and promoting diversity Health and
Slide 23: The Croda difference – why we will succeed
The Croda difference – why we will succeed Our Our Our Our Our History People Innovation Customer Focus Performance Sustainability is We have at our core We have an We have a laser-like We have a strong enshrined in our a can-do, family spirit, entrepreneurial spirit, focus on our customers, track r
Slide 24: Delivering our Sustainability strategy
Delivering our Sustainability strategy Phil Ruxton – Vice President, Sustainability 24
Slide 25: 2020 delivery – embedding our Sustainability strategy
2020 delivery – embedding our Sustainability strategy Winning hearts and minds Driving progress 2020 deliverables Established Sustainability Committee • Completion of 2016-2020 • Remit: Sustainability objectives – Development, measurement • Decarbonisation roadmaps and delivery of Croda’s for key si
Slide 26: Croda – already a leader in Sustainability
Croda – already a leader in Sustainability Clearly differentiated Externally recognised by rating agencies Bio-based organic raw materials 39th/3200 AAA 63% Industry average 10% B-B-B 11th Lower hazard chemistry* 51 77% No. of high-hazard chemicals Top 5% 33 12th/120 20 14 14 13 12 11 11 6 6 5 Recog
Slide 27: By 2019 we had already achieved a lot
By 2019 we had already achieved a lot Emissions reduction Sustainable palm 99% of sites using RSPO certified Palm Oil Safety Health and wellbeing 58% reduction in Total Recordable Injury Rate (TRIR)* – 40 million lives protected from skin cancer – 2 billion doses of vaccine containing Croda technolo
Slide 28: New performance targets will drive leadership to 2030
New performance targets will drive leadership to 2030 4:1 Carbon cover 2030 OBJECTIVE DELIVERABLE PERFORMANCE 50% Scope 1 / 2 reductions 15% Scope 3 reductions CLIMATE 75% Bio-based Land saved > Land used New crop technologies LAND Compromised land partnerships 25% WHO pipeline vaccines Protect 60 m
Slide 29: Supported by measurement of Sustainable revenue
Supported by measurement of Sustainable revenue Bio-based organic raw materials Revenue by UN SDGs Illustrative purposes only 2020 2030 63% 75% 25% Industry average 10% “Green” revenues Guided by best practice in disclosure 50% Defined as those that are derived from products and services that have a
Slide 30: Becoming Climate Positive
Becoming Climate Positive Julia Creasey – Sustainability Manager 30
Slide 31: Understanding Croda’s carbon footprint
Understanding Croda’s carbon footprint Upstream Scope 3 Scope 2 emissions (indirect) emissions % GHG emissions 2018 Purchased goods and services 1% 3% 10% 33% 86% Purchased 1% 2% 1% 2% 7% electricity 98% 95% 89% 65% 7% and steam CAPEX Scope 1+2 199,185 tonnes CO2e Business travel Scope 3 2018 942,13
Slide 32: Croda’s 2030 carbon objective
Croda’s 2030 carbon objective Croda’s carbon objective Climate Positive: enabling more carbon to be saved than we emit Reducing Croda’s carbon footprint Saving carbon Carbon absorption Product Manufacture Product Use as raw materials grow Low cradle-to-gate Multiple Reduced/avoided carbon footprint
Slide 33: How do we deliver lower carbon?
How do we deliver lower carbon? Reducing Croda’s carbon footprint Saving carbon Product Manufacture Product Use Sustainable Innovation Carbon Cover Four externally verified case studies: • Replacing petrochemical • Coltide Radiance for clothing lifetime extension raw materials with • Perfad Friction
Slide 34: Reducing Croda’s carbon footprint
Reducing Croda’s carbon footprint…. 250000 Scope 1 and 2 target CO2 emissions / tonnes 200000 2030 interim SBT aligned to 1.5°C 150000 100000 Net zero by 2050 50000 0 2018 2023 2028 2033 2038 2043 2048 Scope 3: Supply chain engagement Leadership through ambition: • Only 8 companies in the chemical s
Slide 35: …through credible solutions
…through credible solutions Carbon reduction Carbon compensation Carbon management • Internal carbon pricing Eliminate Reduce Reuse Substitute GHG Removals Insetting Offsetting • Product portfolio shift • Green financing • Technology innovation / Credibility Credibility partnerships • New ways of wo
Slide 36: Which will make Croda Climate Positive by 2030
Which will make Croda Climate Positive by 2030 Reducing Croda’s carbon footprint Saving carbon Product Manufacture Product Use 2030 By 2030, Key site projects: SBTs achieved; products sold will • On-site renewable energy production Development of carbon cover for Path to Net avoid 3.8 million • Zero
Slide 37: Case Study: first mover advantage in Climate Positive surfactants
Case Study: first mover advantage in Climate Positive surfactants Croda opportunity Made with renewable energy • Transferring existing customers from petro-based • Local landfill gas purchased for electricity and steam to bio-based surfactants without sacrificing performance generation on site • Pur
Slide 38: Case Study: first mover advantage in Climate Positive surfactants
Case Study: first mover advantage in Climate Positive surfactants Example – TweenTM from Croda Crop Protection 2018: use of renewable energy Land Positive: 2.55kgCO2/kg • Increased yields – minimising land use • Reduced pesticide and changing agricultural practice, leading to avoided emissions 2030:
Slide 39: Becoming Climate Positive Summary
Becoming Climate Positive Summary • Croda’s Climate Positive Strategy is about • We will decarbonise credibly in order to saving more carbon than we emit achieve our own Science Based Targets – our proven track record gives us confidence in our ability to achieve our ambition • We can support our cu
Slide 40: Delivering Sustainability to our customers
Delivering Sustainability to our customers Steve Foots – CEO 40
Slide 41: Regulation is a key driver of change…
Regulation is a key driver of change… Regulatory landscape 38 countries 74 countries 41
Slide 42: …But customer demand and market disruption are also creating opportunities
…But customer demand and market disruption are also creating opportunities Regulatory landscape Climate Positive • Innovation for consumer products • Reducing customer scope 3 emissions • Align with customer bio-based agenda Customer demand Land Positive • Supply chain partnerships • New market oppo
Slide 43: Customer perspectives
Customer perspectives Chris Sayner – Vice President, Customer Alliances 43
Slide 44: Our sustainable and customer-centric model
Our sustainable and customer-centric model Our value chain Our sustainable business model Our value chain Consumer Customer Engage Create Make Sell Customer Consumer demand needs product benefit Smart Science to Improve LivesTM • We sell thousands of ingredients to thousands of customers • Through o
Slide 45: Croda – the critical link between customers and suppliers
Croda – the critical link between customers and suppliers Suppliers Customers External validation Partnerships Partnering across the supply chain 45
Slide 46: Customer panel
Customer panel Kyra Constanze Pauly Thomas Udesen Uwe Bergmann Head of Strategy & Impact Programs, Chief Procurement Officer, Director Sustainability Management, Bayer Bayer Henkel 46
Slide 47: Opportunities in consumer markets
Opportunities in consumer markets Maarten Heybroek – Sector President Jennifer Hart – MD Beauty Effects 47
Slide 48: The rise of Sustainability in consumer ingredients
The rise of Sustainability in consumer ingredients Top 7 ways Gen Z & Millennials plan to be more ‘Eco’ New personal care global launches 90% increasingly based on sustainability 80% 70% 1 60% 2 3 50% 4 40% 5 6 +56% growth in launches since 2015 30% 7 20% 10% 0% 2015 2016 2017 2018 2019 Recycle Seco
Slide 49: The rise of Sustainability in consumer ingredients
The rise of Sustainability in consumer ingredients By 2025, the global vegan cosmetics market is forecast to reach $20.8bn and to exceed $1.6bn in the US alone Sources: https://www.cosmeticsbusiness.com/news/article_page/Cosmetics_Business_forecasts_5_Global_Beauty_Trends_of_2020_in_new_report/16077
Slide 50: ‘Clean’ beauty has taken over
The rise of Sustainability in consumer ingredients ‘Clean’ beauty has taken over the cosmetics industry 11 March 2020 • 39% growth for ‘clean’ skin care products 2019 • By 2027, Clean Beauty estimated to reach $54bn Want to know exactly what’s in your products? That’s why we created Target Clean—a n
Slide 51: Changing legislation & consumer trends create new opportunities
Changing legislation & consumer trends create new opportunities • Customers are building or acquiring purpose brands • They are aspiring to be a force for good • They are setting ambitious sustainability targets, often beyond requirements of regulators … Creating a new reliance on suppliers to help
Slide 52: …and customers are seeking ingredient transparency
…and customers are seeking ingredient transparency… What an What an ingredient does ingredient is …from sustainably positioned partners 52
Slide 53: And Croda is responding
And Croda is responding 45 INGREDIENTS 14 INGREDIENTS Commercial Anti-aging Moisturiser Croda Age Defence Sleep Cream Ingredients: Aqua (Water/Eau), Glycerin, Ingredients % w/w Butyrospermum parkii (Shea) butter, Cyclopentasiloxane, Steareth-21, Caprylic/capric Water 65.50 triglyceride, C12-15 alkyl
Slide 54: And Croda is responding
And Croda is responding Bio-based ECO surfactants Sustainable solar protection Botanicals from ethical partnerships Plant Cell Culture actives • Land Positive – Accelerating crop innovation to boost yields and save land54 – Developing technologies to respond to the impact of climate change on land u
Slide 55: Croda has created key platforms to help customers succeed
Croda has created 5 key platforms to help customers succeed 60% renewable Biobased Raw raw materials Materials Further boosted by bio-based surfactants Innovation fully aligned with Croda goals and UN SDGs Sustainable Certified Sustainable Intrinsic sustainability, eg plant Ethical Sourcing Palm Oil
Slide 56: …addressing all their stated needs
…addressing all their stated needs Biobased Raw Materials Sustainable Ethical Sourcing Innovation Ingredient Integrity Product data questionnaires from L’Oreal Ingredient Sustainable Transparency Manufacturing 2019 2020 YTD 56
Slide 57: Case study – Sustainable mineral solar protection
Case study – Sustainable mineral solar protection Customer benefits Sustainability benefits • Protection from skin cancer • SDG 3 Good Health and Wellbeing – 3m cases of skin cancer pa – “Reduce mortality from non-communicable diseases” – Due to sun exposure 50% • Our Commitment – Daily use of SPF 1
Slide 58: Case study: Doubling the lifetime of clothes with Coltide
Case study: Doubling the lifetime of clothes with Coltide Customer benefits Sustainability benefits – verified by Avieco – Market drivers (formerly Carbon Smart) • Coltide RadianceTM doubles lifetime of clothes – Fabric softeners: ‘Care for Clothing’ – Beauty into fabric – eg sensory benefits – 10%
Slide 59: Summary: Opportunities in consumer markets
Summary: Opportunities in consumer markets • Sustainability is transforming consumer markets: – New consumers are driving industry change – Pushing our customers well beyond targets set by regulations – Our customers have developed ambitious programmes • A significant revenue opportunity for Croda:
Slide 60: Opportunities in Life Sciences
Opportunities in Life Sciences Dr Nick Challoner – Sector President 60
Slide 61: Trends are driven by regulatory change and customer need
Trends are driven by regulatory change and customer need Regulatory landscape Key trends in Life Sciences Customer demand Customers Growing population Ageing population Market disruption Demand for transparency Demand for high performance, and trust high quality alternatives 61
Slide 62: Key trends impacting Life Sciences
Key trends impacting Life Sciences 70% increase in food production required to 8 out of top 10 selling drugs are now biologics feed 9bn population in 2050 Formulation challenges 8/10 top selling drugs unmet by are biologics standard excipients Crops need to be grown more efficiently to meet demand P
Slide 63: Sustainability – a driving force in Life Sciences
Sustainability – a driving force in Life Sciences Saving more land Improving health than we use and well-being by to maximise land supporting clinical productivity development and treatment of Improving lives challenging of more people diseases via optimised health solutions Growing population Agein
Slide 64: Opportunities in Crop Protection and Seed Enhancement
Opportunities in Crop Protection and Seed Enhancement Having a positive impact On increased yields and efficiency Environmental consciousness Through minimising required resources In close collaboration With our customers and other partners in the food chain 64
Slide 65: Sustainable innovation in Crop Care
Sustainable innovation in Crop Care Climate On target Responsible Driving industry adaptation spraying production change Seed priming Drift reduction ECO™ Microplastic- adjuvants range free coatings 65
Slide 66: Opportunities in Health Care
Opportunities in Health Care Partnering to target new diseases Influenza Staphylococcus aureus Tuberculosis Shingles Contributing to the successful development and commercialisation of 25% of WHO-listed pipeline vaccines by 2030 Covid-19 Malaria 66
Slide 67: Driving sustainable innovation in Health Care
Driving sustainable innovation in Health Care Advanced Extending drug Boosting Tackling technical shelf life pharmaceutical challenging performance effectiveness pathogens $2bn speciality Biodegradable excipient niche Lipid $0.5bn sugar nanoparticles adjuvant niche excipients 67
Slide 68: Opportunities in Life Sciences summary
Opportunities in Life Sciences summary • Sustainability is transforming consumer markets: - New legislation - Changing customer demand - Market disruption • Driving a requirement for sustainable innovation • Significant revenue opportunity 68
Slide 69: Summary
Summary Steve Foots – Chief Executive Officer 69
Slide 70: Delivering customer opportunities from Sustainability
Delivering customer opportunities from Sustainability Regulatory changes, customer demand and market disruption will drive significant opportunities to 2030 and beyond Ingredient Our consumer markets need innovative sustainable products from bio-based, Integrity™ traceable ingredients, produced with
Slide 71: Summary
Summary • Sustainability is core to: • Strategy underpinned by: - Our Purpose: Smart Science to Improve LivesTM - UN SDGs - Our Commitment: to be Climate, Land and - Increasing regulation People Positive - Customer and consumer trends - Our portfolio: bringing more natural products to market • Signi
Slide 72: CRODA
CRODA