Half Year 2024 Croda International PLC Earnings Call Transcript
Key Points
- Croda International PLC (COIHF) reported a 14% increase in consumer care volumes, indicating strong demand recovery.
- The company has maintained high and stable gross margins despite raw material price volatility over the past three years.
- Beauty care is experiencing significant volume growth, particularly in North America, driven by local and regional customer innovation.
- The company is seeing strong growth in local and regional markets, with notable increases in China, India, Brazil, and North America.
- Solus Biotech acquisition is progressing well, with promising growth potential in both life sciences and personal care segments.
- Consumer care profits declined by 13% despite volume growth, indicating challenges in translating volume increases into profit.
- Margins in life sciences have decreased, with a notable 300 basis point drop compared to the previous half-year.
- The crop segment is experiencing prolonged weak trading, affecting overall margin performance.
- There is pressure on pricing in the consumer health part of pharma due to increased competition and raw material cost reductions.
- The company is cautious about crop recovery, impacting guidance and overall business confidence.
Good morning, everybody. And welcome to our live Q&A. (Event Instructions) Matthew Yates, Bank of America.
Questions & Answers
I'd like to ask about the margin in consumer. So you had a nice 14% rebound in volumes, but profits down about 13%, if my math is right. It's essentially -- why the lack of operating leverage in this business with margins still below 18%, obviously needs to be considerably higher in the past. Steve, you talked about gross margins being okay. So I'm guessing the pricing is really just reflecting the savings you've had on the raw mats.
So why are we not seeing that the volume growth translated to higher margins? Is that because the volumes are coming in diluted businesses and you've still got, frankly, I would say, a pretty poor performance in beauty care. Or are the results being distorted by this whole shared site model that we talked about last year with the other parts of the portfolio still lagging in
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
