Croda International PLC · LSE:CRDA
Croda International — FY2002 Earnings Presentation
32 slides from Croda International's earnings presentation, February 2003
Slide 1: Croda International Plc 2002 Preliminary Results
Croda International Plc 2002 Preliminary Results
Slide 2: Summary
Summary • Results above market expectations • Ongoing pre-tax profit up 23% • Net debt reduction of £11.5m • Good growth in core markets • Outlook positive for all sectors
Slide 3: Summary of continuing operations
Summary of continuing operations 2002 2001 £m £m Sales 295.0 285.6 ============= ============ Operating profit 42.3 36.5 Interest (4.0) (5.3) ___________ ___________ Profit before tax 38.3 31.2 ========== ========== EBITDA 56.9 49.9 ========== ==========
Slide 4: Statistics
Statistics 2002 2001 EPS normalised (p) 17.7 14.4 Dividend per share (p) 11.5 11.3 Cash flow per share (p) 20.0 21.8 Dividend cover (x) 1.5 1.3 Interest cover (x) 10 7 Tax rate 35.8% 40.0%
Slide 5: Specific operating costs
Specific operating costs £m Expected Actual Actual 2003 2002 2001 UK Pension costs * 6.0 3.6 3.4 Insurance 5.5 4.3 3.7 * 2003 cash cost will be close to that of 2002
Slide 6: UK pension costs
UK pension costs £m SSAP 24 FRS 17 Balance Sheet Asset/(liability) before tax 32.2 (89.7) Deferred tax (9.7) 26.9 __________ __________ Net asset/(liability) December 2002 22.5 (62.8) ========= ========= Net asset/(liability) December 2001 20.1 (3.9) ========= =========
Slide 7: UK pension costs
UK pension costs £m SSAP 24 FRS 17 Estimated Profit and Loss Within operating profit 6.0 4.4 Financing - 0.8 __________ __________ Net cost 2003 6.0 5.2 ========= ========= Net cost 2002 3.6 2.5 ========= =========
Slide 8: Exceptional closure/disposal costs
Exceptional closure/disposal costs 2002 £m Non-cash 24.7 Cash (net of proceeds) 4.2 __________ 28.9 __________
Slide 9: Cash
Cash • Working capital reduction of £1.4m • Net debt reduction of £11.5m • Net debt at 31 December 2002 was down to £52.1m
Slide 10: Operating cash flow
Operating cash flow 2002 2001 £m £m Operating profit 40.3 37.0 Depreciation and amortisation 16.3 15.7 Stock 4.8 3.6 Debtors (3.7) 6.2 Creditors 0.3 0.7 Other (6.4) (5.2) __________ _________ Operating Cash Flow 51.6 58.0 __________ _________ Working Capital (days sales) 76 87
Slide 11: Net cash flow
Net cash flow 2002 2001 £m £m Operating cash flow 51.6 58.0 Interest (3.9) (5.4) Dividends (13.0) (13.4) Taxation (10.7) (3.7) Net Capex (13.4) (23.1) Own shares (0.8) (1.3) Acquisitions/Disposals (1.8) 26.6 __________ _________ Net cash flow 8.0 37.7 __________ _________
Slide 12: Turnover change on prior year
Turnover change on prior year* Volume Currency Mix/ Total Price % % % % H1 -2.0 -0.5 +5.0 +2.5 H2 +1.5 -4.0 +6.5 +4.0 Year -0.5 -2.5 +6.0 +3.0 * Continuing operations only
Slide 13: Sales by destination
Sales by destination * 2002 2001 £m % £m % United Kingdom 50.2 17.0 48.6 17.0 Rest of Europe 81.4 27.6 78.2 27.4 Americas 97.5 33.1 91.6 32.1 Asia 39.6 13.4 38.1 13.3 Rest of World 26.3 8.9 29.1 10.2 ____________ ___________ ____________ ___________ 295.0 100.0 285.6 100.0 ____________ ___________ _
Slide 14: Sales by market
Sales by market * 2002 2001 £m % £m % Personal & Health Care 160.7 54.5 150.0 52.5 Home Care & Plastics Additives 43.7 14.8 43.4 15.2 Industrial Specialities 55.7 18.9 54.0 18.9 Other 34.9 11.8 38.2 13.4 ___________ ___________ ___________ ___________ 295.0 100.0 285.6 100.0 ___________ ___________
Slide 15: Raw materials: crude vegetable oil prices
$/mt 200 250 300 350 400 450 500 550 600 650 Jan-01 Feb-01 Mar-01 Apr-01 May-01 Jun-01 Jul-01 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01 Jan-02 Feb-02 Mar-02 Crude Vegetable Oil Prices Apr-02 May-02 Jun-02 Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Palm Soya Rape Raw materials Coconut
Slide 16: Raw materials: fatty acid and fatty alcohol prices
Raw materials Fatty Acid and Fatty Alcohol Prices Price Fatty Acid 1 Fatty Alcohol Fatty Acid 2 Fatty Acid 3 2001 Q1 2001 Q2 2001 Q3 2001 Q4 2002 Q1 2002 Q2 2002 Q3 2002 Q4 2003 Q1
Slide 17: Oleochemicals
Oleochemicals 2001 2001 2001 2002 2002 2002 First Second Year First Second Year half half half half Turnover £m 127.3 120.1 247.4 133.3 126.8 260.1 Trading profit £m 20.9 16.1 37.0 22.2 21.2 43.4 Margin % 16.4 13.4 15.0 16.7 16.7 16.7
Slide 18: Summary of trading
Summary of trading • Good sales growth in Personal and Health Care • Margins back over 16% • Strong bounce back in the Americas • Raw material prices rose slightly in second half
Slide 19: Strategic and operational progress
Strategic and operational progress
Slide 20: Restructuring
Restructuring • Two oleochemical sites closed • Three businesses sold/closed • One business radically restructured
Slide 21: New products
New products • Crodarom - Plantago • Sederma - Kombuchka • Oleochemicals - Proteins for fabric care
Slide 22: Crodarom
Crodarom • Botanicals business • Combination of existing small Croda plant extract business and similar, but higher technology, botanicals business acquired as part of the Sederma transaction in 1997 • Sales and profits have more than doubled from 1997 to 2002
Slide 23: Plantago
Plantago l Anti-inflammatory l Reduces skin redness l Anti bacterial l Free radical scavenger Plantago Lanceolata
Slide 24: Plantago
Skin redness (in %) 110 IRRADIATION, 1,5 MED 3 4 Time (in days) —m— Untreated Skin ~~ Vehicle Plantago
Slide 25: Kombuchka
Kombuchka • Fermentation product of black tea rich in organic acids and vitamins • Smoothes the skin (reduces roughness by 16% in 28 days) • Improves complexion in three ways: - radiance (+15%) - clarity (+11%) - colour tone (+20%)
Slide 26: Kombuchka
Kombuchka In vitro Stimulation of adipocyte differenciation Control Kombuchka™ 3% ar . » <=" “= S Kombuchka™ increases adipocytes population in the skin and thus restores volume of the deficient zones
Slide 27: Kombuchka
Kombuchka Decrease of skin roughness
Slide 28: Proteins for fabric care
Proteins for fabric care Coltide HQS- Quaternised Protein • Enhances the conditioning properties of fabric conditioners • Significantly improves the “handle/ feel” of cotton terry towelling • Reduces fibre erosion in cotton and fibre erosion /degradation in wool • Increases the lubricity of wool fib
Slide 29: Proteins for fabric care: Volunteer Preference
Proteins for fabric care Coltide HQS study - Subjective Handle Results Control 20 Test No Preference Volunteer Preference 15 20 Assessors - 10 Male, 10 - 10 Female 5 0 20 Wash Cycles
Slide 30: Proteins for fabric care: Comparison of Cotton Fibres
Proteins for fabric care Coltide HQS study - Comparison of Cotton Fibres Control Marked fibrillation Fibres 20 Wash Cycles Test Fibres Much reduced fibrillation with HQS
Slide 31: Health Care update
Health Care update • Provensis • Airozin • IBS • Ultra High Purity Lipids
Slide 32: Outlook
Outlook • Reorganisation to increase focus on core markets • Some costs rising but manageable • Development of speciality lipids business • Constant enhancement of our intellectual property • Industrial businesses beginning to recover