Croda International PLC COVID-19 update
RNS Number : 5696K
Croda International PLC
23 April 2020
23 April 2020
Croda International Plc ("Croda" or the "Group"), the speciality
chemical company that creates high performance ingredients and
technologies relied upon by industries and consumers globally,
provides the following update in light of the ongoing COVID-19
pandemic and ahead of its Annual General Meeting today.
The Group's ongoing priority is the health and safety of our
employees. We have implemented appropriate working practices across
the Group, including colleagues working from home where possible
and the adoption of flexible and separated working arrangements in
manufacturing sites and warehouses. We are adhering to government
advice across all the different countries where we have operations.
Currently, all of our 19 principal manufacturing sites are
operating, reflecting our critical supplier position to a number of
industries during the COVID-19 crisis (including health care, crop
care, cleaning and sanitisers), although our India and Singapore
sites are operating with some restrictions. Raw material supply
chains also remain broadly secure, with limitations on the
availability of a small number of materials. Our business
continuity plans have been fully mobilised and are operating well.
We currently have no plans to furlough or reduce pay for
Current trading and prospects
We continue to maintain high service levels to support our
customers. Demand has remained solid, with customers primarily
focused on securing their own supply chains through us at this
time. Core Business sales and Group profitability in the first
quarter ended 31 March 2020 ('the quarter' or 'Q1') were broadly in
line with the Board's expectations and the prior year. Q1 was
expected to be the strongest comparator period from 2019.
Asia was adversely impacted by the earlier shutdown in China
but, encouragingly, North Asia delivered broadly flat sales across
the quarter. North America returned to sales growth in the quarter
whilst Latin America was below a strong comparator. Europe saw some
demand weakness in Personal Care and Performance Technologies but
good growth in Life Sciences.
As the second quarter commences, whilst conditions in some
markets are more variable than usual, the value of our customer
order book remains solid and in line with normal circumstances.
However, visibility is limited and there is uncertainty as to how
the COVID-19 crisis will affect future sales.
Whilst we continue to invest in organic opportunities to grow
the business for the future through our ongoing capital expenditure
programme, we are implementing discretionary operating cost savings
and have the capacity to adjust further to meet changing
The liquidity and business profile of the Group is strong. We
have undertaken extensive scenario testing, factoring in a variety
of potential outcomes, which indicate that the Group has sufficient
liquidity to absorb an extended period of uncertainty. The Group
has a strong balance sheet, having completed its debt refinancing
in 2019, with no material debt maturities falling due before 2023.
As at 31 March 2020, the Group had committed funding in place of
GBP1,076m, with undrawn committed facilities of GBP457m, GBP91m in
cash and a leverage ratio of 1.4 times net debt to EBITDA (compared
to a covenant maximum of 3.5x, measured semi-annually).
Croda has operated for many years with a prudent leverage and
dividend distribution policy. After careful consideration of the
position of all stakeholders and treating all groups consistently
and fairly, the Board has decided to pay the final 2019 ordinary
dividend of 50.5 pence per share (GBP65.0m), announced in the
Group's annual results in February 2020, subject to approval by
shareholders at today's Annual General Meeting.
For enquiries contact:
Investors: David Bishop, Croda +44 7823 874428
Press: Charlie Armitstead, Teneo +44 7703 330269
The Core Business comprises Personal Care, Life Sciences and
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(END) Dow Jones Newswires
April 23, 2020 02:00 ET (06:00 GMT)
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