Croda International Plc (LON:CRDA), the speciality chemical company that creates high performance ingredients and technologies relied upon by industries and consumers globally, today announced its half year results for the six months ended 30 June 2018.
Reported results
|
Reported results (IFRS) |
Half year ended 30 June |
|||
|
|
|
2018 |
2017 |
% change |
|
Sales |
£million |
702.8 |
707.3 |
(0.6)% |
|
Operating profit |
£million |
174.3 |
174.1 |
+0.1% |
|
Profit before tax |
£million |
170.8 |
168.0 |
+1.7% |
|
Basic earnings per share (EPS) |
Pence |
97.5 |
92.4 |
+5.5% |
|
Ordinary dividend per share |
Pence |
38.0 |
35.0 |
+8.6% |
· Sales 0.6% lower at reported currency, after adverse impact of stronger Sterling on translation of 4.1%
· Profit before tax up 1.7% at reported currency, after adverse 4.6% impact from currency translation
· Basic earnings per share (EPS) up 5.5% at reported currency, including benefit of lower tax rate in US
· Interim dividend increased by 8.6% to 38.0 pence
Adjusted1 results
|
Adjusted results |
Half year ended 30 June |
||||
|
|
|
2018 |
2017 |
% change |
% change constant rate2 |
|
Sales |
£million |
702.8 |
707.3 |
(0.6)% |
+3.6% |
|
Operating profit |
£million |
178.5 |
175.8 |
+1.5% |
+6.0% |
|
Profit before tax |
£million |
175.0 |
169.7 |
+3.1% |
+7.7% |
|
Basic EPS |
pence |
100.2 |
93.4 |
+7.3% |
+12.0% |
|
Return on sales |
% |
25.4% |
24.9% |
+0.5%pts |
n/a |
|
Free cash flow |
£million |
62.7 |
40.5 |
+54.8% |
n/a |
1Adjusted results are stated before exceptional items, acquisition costs and amortization of intangible assets arising on acquisition, and tax thereon, as set out in note 1 below
2Constant currency results reflect current year performance translated at the prior year’s average exchange rate, as set out in note 2 below
· Growing the Core
o Record profit – profit before tax up 7.7% and basic EPS up 12.0%, at constant currency2
o Robust top line momentum – Core Business sales up 4.7% at constant currency, demonstrating healthy demand in all three businesses
o Further improvement in profitability – return on sales up 50 basis points to 25.4%
o Stronger free cash generation – over 50% increase in free cash flow, driven by end of capital investment ramp and lower tax
· Stretching the Growth
o Continued investment: two technology acquisitions completed during the period, supporting strategy to accelerate top-line growth through disruptive technologies, new market adjacencies and smart R&D
o Innovation in new products: increased sales of New and Protected Products (NPP) in Personal Care and through technology acquisitions, offset by impact of product exits in Life Sciences and Performance Technologies. NPP sales increased to 27.7% (2017: 27.5%)
Sector results (adjusted basis)
· Three strong businesses
o Excellent sales growth in Personal Care, up 9.3% at constant currency. Operating profit growth of 6.1% at constant currency
o Resilient Life Sciences performance despite headwinds, with sales up 2.3% (+7.4% excluding impact of API contract withdrawal) and operating profit up 1.8%, at constant currency
o Impressive profit growth in Performance Technologies, with operating profit 15.2% higher on sales up 1.7%, at constant currency. With its transition to higher value add products, the sector is on target to achieve its medium term return on sales target of 20%.
Commenting on the results, Steve Foots, Chief Executive Officer, said:
“This is a strong first half performance. We are delivering our strategy of ‘Growing the Core’, driving top line organic growth at industry leading margins to achieve superior returns. Alongside this, we are ‘Stretching the Growth’, accelerating delivery across our markets by investing in disruptive technologies and exciting new growth opportunities. We have encouraging momentum in our consumer businesses and Performance Technologies has delivered double digit percentage profit growth for the third successive year, strong progress that is supported by improving cash generation, underpinning confidence for the full year.”
