Croda International Plc

Hello and welcome to CRODA International Q3 2025 Fails Update. My name is Laura and I will be your coordinator for today's event. Please note this call is being recorded and for the duration of the call, your lines will be on listen only mode. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star 1 on your telephone keypad to read the say a question. I will now send you over to your host, Seafood, to begin today's conference. Thank you.

Morning, everyone, and thanks for being on the call. I'm here with Stephen. He'll join me in answering your questions in a moment. I'll let me start by quickly highlighting three key points coming from the Q3 update. Firstly, group sales are up 6.5% in constant currency, a sixth consecutive quarter of sales growth, and we're pleased with that. Quarter three hasn't seen any big surprises for us, with customer demand for our ingredients broadly the same as quarter two. And most encouragingly, we're seeing sales growth with innovation led, driven by an improvement in beauty actives, continued strength in F&F, and an ongoing recovery in crop. Secondly, we continue to optimize utilization at our shared production sites, through targeted sales and ingredients in beauty care, crop and industrial specialty, as part of the actions we've been taking since 2024 to increase operating margins. Alongside good growth in actives and F&F, this resulted in another quarter of low double-digit sales volume increases, compared with the same period last year. And as a result of these actions, the mix continued to be negative year on year, due to both product mix and business mix, And like for like prices, we made largely consistent for prior year. Thirdly, we continue to make good progress with our transformation plan to improve earnings and returns. We're driving sales by maximizing returns from our portfolio, leveraging our proximity to local and regional customers and stepping up innovation with all customers where we are seeing strong demand. And we're driving margin recovery by finding more ways to optimize capacity and by taking out costs as we simplify and modernise the business. We're on track to realise £25 million of cost savings this year and continue to expect to deliver £100 million of annualised savings by the end of 2027, all contributing to marginal recovery. Finally, our guidance for the full year is unchanged. We expect the more challenging trading environment and low order book visibility to continue for the remainder of the year But in line with previous years, absolute sales in quarter four are likely to be seemingly lower than in the first three quarters, as customers typically manage their working capital into the year end. Despite this, the combination of good sales growth year to date and anticipated cost savings means that we continue to expect 265 to 295 million pounds of group adjusted profit before tax at constant currency. Let me stop there, hand over to you for questions from the sell side analysts. So thanks for that.

Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Thank you. We'll now take our first question from Lisa, the niece of Morgan Stanley. Please feel free.