Good morning, everybody. I'm joined in the room this morning by Reece and Steve Foots, CEO, and Louisa Burdett, CFO, is also dialing in. We're recording this call this morning. We'll have some short opening remarks from Steve, and then we'll have 40 minutes for plenty of Q&A. Over to you, Steve. Thanks. Morning, everybody, thanks for joining the call at such short notice. Hopefully, you've had a chance to read the trading update that we issued first thing. There are two really key points to highlight in terms of what's changed for us since our results at the end of February. Firstly, it's in Consumer Care. Whilst we've been encouraging, while we've been encouraged by the improving performance on Q4 last year, we continue to see sequential in recovery Q1 to Q2. The recovery has just been as quick as we'd anticipated back in February. Destocking is ongoing, and we now expect that to continue into the H2 of the year. As a result, volumes were down double digits for the first five months versus the same period last year. The price increases that we introduced last year, together with this favorable FX, have helped to offset that impact. Consumer Care margins have remained at similar levels to the H2 of 22, principally due to this weaker volume. We still expect the recovery in Consumer Care to continue throughout the year. We are encouraged with where we are, and I'm sure we'll take questions on that, but it'll just be more gradual than we initially thought. Secondly, in crop care, the destocking that we had expected to start later in the year has already begun and has been much more rapid than we anticipated. We expect that this will now continue until the new planting season at the end of Q3, with some improvements starting to come through during Q4. It's worth noting that Life Sciences margin has been impacted by the adverse mix, including, of course, lower sales of COVID-19 applications in the pharma business, which is all baked in for the H2. Our expectations for that liquid business in H2 remain unchanged and are firm now for the H2. Weaker volumes, largely a result of continued destocking in Consumer Care and earlier than expected destocking in crop. They're the two changes. They've impacted our margins, leading to PBT of GBP 143 million for the first five months of the year, supported by the minimal net finance cost. That is lower than planned, and as a result, we're revising our overall expectations for the year, and now expect profit before tax to be between 370 million and 400 million for the full year. Macro impact to one side, I continue to be very encouraged by the exciting progress we're making, expanding our innovation pipelines with Croda. As well as giving you further details on our performance, we'll talk a lot more about the scale of our innovation in all of our business areas as we report half year results in July. Louisa, Louisa and I are very happy to take questions, so over to you, operator, to start the Q&A. Thank you. As a reminder, if you'd like to ask a question, you can press star, followed by one on your telephone keypad. If you'd like to remove your question, you may press star followed by two. Please ensure you're unmuted locally when asking your question. Our first question for today comes from Charles Eden of UBS. Charles, your line is now open. Please go ahead. Hi, good morning. Thank you very much. I'll limit myself to two questions. The first one, Steve, you sort of alluded to it, about how things are progressing currently. If you could give us an update on the very early trends in June for Consumer Care, are you seeing any recovery at all yet? My second question, just on the guidance range that you've put out for the full year, could you help us sort of understand what you're baking in terms of recovery, particularly in Consumer Care, and sort of obviously the margin commentary being similar to the H1 being similar to the H2 of last year? What are you expecting for Consumer Care margins for the full year, please? Thank you. Yeah, great. Thanks, Charles. I'll let Louisa take question two. Just on the Consumer Care progression, you know, it was negative volumes we all saw in Q4, H2, but mainly in Q4. Volumes have been less negative in Q1 and less negative again in Q2. What we track is the invoice day run rate, which is for Consumer Care, and that's improving, you know, month-on-month. From a sales point of view, we're broadly flat, actually, we turned positive, just modestly positive in May from a revenue point of view. We expect that to continue as comparatives get weaker. The revenue line is pretty robust. The issue really is just this overhead recovery on weaker volumes that, you know, you saw in Q4. That's just continuing through. Actually, at the product margin level, which, you know, I talk a lot about, the product margins in Croda are very robust, you know, they're solid, and they're, they have been for several months now. The issue really is just that weakness in the overhead recovery, the volume, which is driving that overhead recovery weakness, which is very unusual in Croda. When, you know, when volumes are down low double-digit percentages, you know, you do get that. That's what we're living through, just until we recover through that. Revenue-wise, you know, pretty robust actually, from what we can see. Also behind that, you're just seeing that volume thing. I think the other point, and then I'll pass to Louisa, is, if you look around the business on Consumer Care, it's that weakness in America, which is weak but stable, with early signs of improvement, and you can see that in the order book. Also, you've seen Europe, which is modestly, you know, modestly destocking, particularly in France, from what we can see in there. On the other side of things, you know, we've had a good start in China. China's positive for Consumer Care for the first five months, and it's been a really good start there. you know, it's patchy around the edges, and Fragrances and Flavors has had a good start too, for the first few months. It's, it's a mixed bag, but fundamentally, revenue is holding up well, margins aren't, and margins all the way down to just this negative volume that's driving that weakness. Louisa, let me pass to you on the on the other point about the assumptions we're making on the range. Yeah. Hi, Charles. Good morning, everyone. The question was around what we're baking in for our guidance range of 370 to 400. I'll provide some overall comments, and we can go to Consumer Care specifics as needed. In essence, the 370 million is assuming no improvement, half- on- half, and it's providing what we believe is a floor, based on annualizing our year-to-date position, plus adding the lipids in H2, which we've consistently said would come in Q4, and that guidance has not changed, as Steve said in his intro. The 370 is essentially assuming no improvement in Consumer Care. Then the move up to 400, Charles, I guess, has a couple of layers in there. There's sort of a layer that is within our control, what I would call sort of implementing sensible self-help cost actions, that we can choose to do, but don't damage the business in the medium term, whilst we wait for that destocking to come through. Keeping our focus on growth projects. Then at the higher end of that range of 400, it's an assumption that the Consumer Care growth rate, half-on- half, increases between 10% and 20%. Essentially, the 370 assumes that we get no improvement for the rest of the year, and that the destocking inflection takes longer to come through that H2. Does that help? Yeah, no, that's helpful. Thank you. I guess you're sort of assuming if there's no recovery in the Consumer Care in the bottom end of the range, effectively what you're saying is, the margin at the bottom end for Consumer Care would be around the 19% level that it was. Yes, yes. [crosstalk] in the first, H2 of last year and H1 of this year. Yeah. As Steve said, look, we've got double-digit volume declines in the H1 of 2023. We had double-digit volume declines in the H2 of 2022, at the time, Jez guided that that's having about, you know, a couple of points of negative impact on the Consumer Care margin. We're in that sort of territory. Clearly, if we move up through the range from that base of 370 to 400 on higher Consumer Care volumes, that will give us some tailwinds behind the margin. Again, emphasizing that our 370 is sort of a mechanical floor based on no improvement. That's clear. Thank you. Thank you. Our next question comes from Matthew Yates of Bank of America. Matthew, your line is now open. Please go ahead. Hi, Steve, Louisa, good morning. Steve, you said in your introductory there that a double-digit volume decline is highly unusual for a business like Croda. Do you have any market data or feedback from customers that would help us understand how big the disconnect is between your sell into the customer base or the channel, and ultimately what is being sold out? Say, it's somewhat surprising to see your volumes down by this magnitude and for such a long period now. That brings me to my second question, as to wondering whether there's a Croda specific issue here with market share loss. Have you been too aggressive in pricing? Especially now that there's some signs of cost deflation in your raw materials, what's your strategy for trying to retain that and improve your margin, versus trying to pass it through to maybe regain some volume to fill up the plans? Thanks. Good questions, Matthew. On the second one, I mean, that's always a question. You know, we spend a lot of time, we all spend a lot of time with our customers over the last few months, just getting up to date views and things. You know, the common theme generally is, I think it's the multiple stocking. It's mainly the multiple stocking points. We're not losing market share. There's a little bit around the edges, but it really is around the edges to a, to a small degree. I think, you know, what a lot of our customers are saying is, "Look, demand is holding up pretty well." You know, the sentiment from them all is... You see that in our innovation programs. Normally you would see things being reduced, paused, and talk of innovation projects. We're not seeing that. There's two leading indicators we have on demand, that one, then the second one is around raw materials themselves. They're not coming down like a stone, you know, they're dropping about 3% to 4%. That's a good proxy for demand. It looks like demand is solid. Back to your point, we, you know, we are flexible, particularly in the Beauty Care space with pricing. I know one of the long-standing issues is, you know, are we, are we too price hungry at the bottom of, at the tail of Beauty Care?... Are we missing out on volumes? Interestingly, the encouraging growth over the last five or six months, the run rate improvement has been led by Beauty Care, which is really interesting, because Beauty Care is more focused on the mass these markets. That, that supports volume recovery as well, ultimately coming through, because, you know, that's more, that's the volume end of Consumer Care. That's coming through, and there's quite a lot of tactical business. You know, if you remember, one of the issues we had Q4 was the unplanned outage of a couple of our sites, because, we didn't take them offline in the heat of the demand period for the pandemic. From safety, from a safety reason, we did that. You've got to buy yourself back into some of that business, which we're doing. We are doing that now. Actually, the one area of Consumer Care we look much more closely at these days is the Beauty Care area, and I'm really pleased with... That's coming back, you know, as I said, sequentially, month- on- month, so I'm encouraged with that. I think the first, your first point, Matthew, was, just remind me, was around any kind of specific issues, was it in the- I guess the disconnect, maybe if there is a disconnect between sell-in and sell-through, I mean, I struggle to believe that the underlying category is down double digits. How do you? Yeah. Think about that converging or normalizing? Yeah, I mean, I call it, you know, being, I've been around all, many of the conferences this last two or three weeks. You know, we see about eight stocking points for our business. I don't know whether that's different to everybody else, but, you know, so when you buy a shampoo or conditioner on the shelf, there's about eight stocking points between there and quarter shipping. I think the general view from everybody is, you know, you're not losing business. It's all about just this higher stock level that's in the chain somewhere, either in six or seven parts to it, or three or four of them, and the unwind is just taking a bit longer. We're not far away from positive volumes in Consumer Care when you start to look at the order book. That's partly because of weak comparators. You know, as we always said, H1 is going to be a bit more price skewed and on negative volumes, and the H2 should reverse. We're seeing that trend play out. It's just that the drag we've got is on those negative volumes, for the, than the ascent. We see that the majority of that is just down to this destocking. We don't see anything else, and our intelligence is around, you know, literally hundreds of data points, from big customers to small customers as well. I don't know. It remains to be seen whether anybody else has got the acute volume issues that we have, but we see that as mainly as just a reset, a correction, a fundamental correction in volumes, which is upon us now. It's a reset, it's a period of reset, to rebase demand, and stock levels should sort themselves out over the next few months. Louisa, do you want to make any other points? No, only just to reemphasize, I know it was said in the opening statements, but it's been threaded through what you said, Steve. We are down double-digit volumes in the H1, but there has been progressive volume growth over H2, sorry, H1 23 versus H2 22, of high single digits. To Steve's point about that reset and rebase and not too far from hopefully a volume inflection point, which, you know, we're starting to see that positive movement on volume. Thank you, both. Yeah. Thanks, Matthew. Thank you. Our next question comes from Gunther Zechmann of Bernstein. Your line is now open. Please go ahead. Hi, good morning, everyone. Steve, I'd just like to understand a little bit better the weakness in Consumer Care, please. You mentioned it down double digits, but you said China is up five months. You said, I think, Iberchem, the Fragrances and Flavors business is doing quite well as well, and you said Beauty Care is doing okay. What's driving that double-digit weakness then, please? Should we assume that the actives and that the Beauty Care are down something around 40%? What am I missing here? Yeah. The second question is more on. Yeah, maybe a different person. I've got another question as well, please. Yeah. I mean, just for clarity, I mean, we're, if you're looking at. You know, there's two different points here. One is sequential improvement from Q4 to Q1 to Q2, and that's what we're seeing through Consumer Care led by Beauty Care. That's one thing. The other point is there's a year-on-year comparison, obviously, for the first five months versus five months last year. When you look at that, the first five months of this year versus last year, you're seeing a you know, a good growth rate, very good growth rate in F&F. You know, they're in emerging markets more than anything else. You know, we would expect that to grow. Beauty Care is still behind last year, but you'd expect that because don't forget, there's a massive, you know, we're, we're comparing apples with pears from last year, with a very strong demand, H1, 22. You're always going to be behind that. I think the point we're making on Beauty Care, it's improving, yeah, month-on-month. I think actives is mixed, but it's very strong in China. It's quite weak in France, for example. It's slightly behind, but not a huge amount. Again, there's you're talking about, you know, a very strong comparator with the first five months of last year. The businesses are all holding up well. Overall, in the round, our revenue is broadly flat, first five months versus last year, but it's driven by your F&F outpacing that, of course, and actives and Beauty Care slightly behind, but the volumes are still quite weak. That was the point, because there's still quite a lot of price in the mix. That's what's helping us. The encouraging sign, as I said, is this Beauty Care continued improvement, which is gonna be, you know, it's gonna be to volume as well, there as well. Okay, that's very helpful. The second question, sort of impossible to answer, but, what is your measure of inventory levels at your customers? Because you know, guide for destocking for the remainder of the year, it's something we've been discussing since mid last year. Having a year and a half of destocking, I'd never heard of that. What makes you sure that we're talking about destocking and not consumer weakness? Yeah. Yeah. I mean, if you talk about in Consumer Care, what we have to be careful with, it's an industry issue rather than anything else, is destocking is not homogeneous, so it's not the same in every region. A lot of it is just, it's the pandemic effect, where some countries are coming out much earlier than other countries. For example, America, you know, came out of the pandemic first, and they sold their way out of it in the normal American way, and it was a boom period for two and a half years. In North America, we saw the Vox volume starting to come off about this time last year, late in Q2, and they've continued. I think if you look at North America, you can say that, you know, there's overexuberance, there's a lot of stock in the system, but there's probably, you can argue, there's been some reset of demand as well, through that period as well. I think in America, you know, we're very close to a lot of our customers, and it's mixed. Some people are replenishing fully now, into our order book, and some people just got a little bit longer. It doesn't feel like, you know, we're far away. We can see, we map every customer's order intake with us, you know, particularly the big customers, and you can start to see that inflection is not, you know, it's not that far away, but it's just taking a bit longer. That's North America. In Europe, you've just got a mixed bag. It's not, it's more destocking than demand, we think, at the moment. In consumer, you know, pretty robust in Germany, but a bit weaker in France. You know, you look at different countries, and it's quite difficult to draw consistent factual trends. You know, that's what we're seeing there in Asia. Okay. You know, Asia is pretty resilient, and Latin America, too. I think the area that we're looking for when destocking is finished, is America first, because they went into it. They came out of it first, so logically, they would come back first. You know, we, you know, we can update everybody in the middle of the year. As I said, we're encouraged with the trends. You know, sitting above all of this, you know, trying to understand all the geography trends, you know, view, you know, Consumer Care is moving in the right direction. I think the other point is crop. You know, we expected crop. I think our model for the year was sort of moderation by the middle of the year into the H2, and then, you know, it would sort of restart the growth in Q4 at a more normalized level than we would expect. You know, we had a very good starting crop for the first three months, literally within a couple of weeks, we saw the destocking consistently around our five or six major customers in Europe, North America and Latin America. That's easier to see because, you know, there's a higher concentration of customers there, of course. When you look at that, when you look at that trend, that was quite clear. You know, we're innovation leader number one in crop, and we're in a lot of registered products exclusively. You know, you can very easily map that destocking pretty well. You know, the evidence is, it's pretty clear when you talk to your customers. You know, our message, the message back is: Look, they believe they're sitting on three to five, six months of stock, but they would replenish as they lead into the planting season later in the year. That's what we factored into our, back to Louise's point on the range. It's a mixed bag across lots of different countries in Consumer Care, with lots of different stocking positions for customers. For crop, it's much clearer given the higher concentration of customers. If that answers your question, Gunther. Thank you, Steve. That's great. Thank you. Steve, it might be worthwhile just continuing that crop trend whilst you've raised it, because we haven't spoken about that specifically. Just to build on what Steve said, we saw a very strong Q1 in crop, I think that was touched on in the February communication. Also as Steve said, we've seen quite a big retraction there in the last couple of months, we're expecting that weakness to continue through Q2 and Q3. Clearly, that's contributing to our weak H1 performance, as well as the lack of inflection in Consumer Care. It's also impacting our Life Sciences margin, just because of that timing issue on Q2. As Steve said, we, you know, best available information with those handful of large customers is indicating that we, you know, will see some level of recovery in Q4. In terms of absolute profit for Croda, the overall, just a full year ... we believe will be in balance for Crop, based on strong Q1, helping to cover the timing issues in Q2 and Q3. It does give us some short-term margin mix issues in Life Sciences. Thank you, Louisa. Thank you. As a reminder, if you'd like to ask a question, you can press star followed by one on your telephone keypad. Our next question comes from Georgina Fraser of Goldman Sachs. Your line is now open. Please go ahead. Hi. Morning, Steve. Morning, Louisa, thanks for taking my questions. Morning. My first question is around the de-marketing. Now, this is something that we've seen Croda do kind of at various points most years, but it historically hasn't had any kind of big impact on margins. I was just wondering how you're feeling about the de-marketing activities you undertook last year in light of the destocking cycle. Has it exacerbated the losses that you've had on the volume side? Is it making it more difficult to regain market share? Is it going to lead to lower prices? That's the first question. Yes. Oh, sorry, you go ahead. No, no, keep going. No, no, keep going. Keep going with your second question. Cool. All right. Second question is, since we have now seen destocking in two of the three legs of Croda, how are you thinking about the risk of normalizing demand in the healthcare supply chain? Thanks. Yeah, great. I mean, on the de-marketing, I mean, yeah, I mean, there's normal de-marketing for Croda through a normalized cycle, but of course, we had the unplanned outages, which was sort of forced de-marketing, which we didn't really want to do, Q4. Clearly, what happens there is, you know, we try and go back in, and we have a very focused plan to go back in, with price moderation where needed, to try and recover that business. But that never comes back overnight. It's mainly in Beauty Care, is what we're targeting, and we can start to map that coming through. Evidence of Beauty Care coming back more strongly first is probably partly to do with two things: It's, it's recovery in the mass market, mass markets around the place and mass prestige markets. There's also some tactical business starting to come back in, that will drip in over the next few months. Clearly, given the negative volumes, it's, you know, it's not lost on us that sacrificing for a bit of price to recover some volume is good. You know, it's a good decision for us to make sure we get those volumes back up. There's probably a more, more focused view of that, given the overhead issues that you can get with that in a one in a 15-year event that we're living through. We're targeted. We have very, very structured approaches to that from all around the Croda world, and we're monitoring that. It is starting to come back, but it's more weighted to the H2, because inevitably it just takes a little bit longer for some of that to come back. I think on your, on your pharma point, yeah, we, you know, I've been, you know... I'm picking that up from a lot of people, that quite a number of our peers are talking about destocking. I mean, it's around the edges for us. We haven't really called that out in the release because it is around the edges. Because we're in, you know, privileged growth areas, particularly most of our Pharma activity is in those three categories, they're all growing quite well. They're in the growth in the businesses is actually outweighing any sort of fringe destocking around the edges. We're not, it's not a material issue in the numbers around that. Louisa, do you want to add? Steve, I think it is, I think we've made this clear through various interactions with the market since Feb, just we've talked about a sort of necessary de-marketing from not having enough capacity to support demand in the immediate exit from COVID, and then the regrettable de-marketing because of our plants being out. Just to reemphasize Steve's point, that the plants are all back up and running, and that regrettable de-marketing piece is no longer in the mix, which is brilliant. Nothing else to add, Steve. Okay. Thank you both. Yeah, thanks. Thank you. Our next question comes from Nicola Tang of BNP Paribas. Your line is now open. Please go ahead. Thanks, hi, everyone. The first question was on margins in Life Sciences. I think you were already flagging that you have this worsening mix because of, you know, Crop versus Healthcare. I was wondering if you could talk a little bit more about if this is incrementally that much worse. I think you were previously guiding or steering towards low 30s margins in Life Sciences. Does that still hold? The second question, Louisa, in one of the answers to the questions, I think you mentioned sort of sensible self-help. I was wondering if you could just, I guess, talk a little bit about, more about what that, what that is. Thanks. Okay, great. Louisa, do you want to take them both, and then I'll chip in? Look, on the Nicola, on the margins for Life Sciences, you're correct. We guided to just over 30% return on sales in that portfolio. We are going to see that slightly lower at the half year, just because of some of the trends that we've been talking about today, with lower COVID-19 related sales from our principal partner, and that destocking in Crop. We've seen pricing come off in stocks in sort of mid-single digits. We will be seeing something in the probably mid-20s in the half year for Life Sciences. Yes, that's below our previous guidance on that. On Sensible Self-Help, look, there's a balance to be struck here. We have, as Steve said, a lot of really exciting innovation projects. We've got a lot of capital and other projects going on to support growth in the business for the medium and long term. We won't be compromising those. This will be the normal reaction that you would expect from a company managing some short-term trading weakness. You know, discretionary spend, prioritizing the commercial and front end of the business, and just looking at the timing of certain projects and investments to optimize what the teams are working on. Just while I have the floor, related to sort of spending and operating expense. We haven't mentioned any cash position in our communication this morning. I'd just like to take the opportunity to briefly mention that. Clearly, with the drop in EBIT, our cash, our absolute cash delivery this year will be affected. We are going to continue to invest in our capital programs. We've talked very clearly about the investment that needs to go into Pharma, to support the LNP growth. We will have some impact on cash just because of the EBIT drop. We will hopefully have a little bit of working capital positive unwind as our stocks draw down. To get back, Nicola, to your question, margins in Life Sciences will be below the guidance that we gave in February for the half year, and our sustainable self-help is really about sensible choices about where we're putting our cash as we go through this destocking cycle. All right. Thanks very much. Let me just follow up, or just to clarify, the, on Life Sciences margins, is it mid-25s in H1, assuming sort of that the timing of Pfizer, there is still some sequential improvement? Could it be that there's a risk that, you know, if nothing or changes, that actually we're looking at that kind of level for the year? Sorry, Nicola, I didn't make that clear. No, we've obviously got the Pfizer shipments in the H2 of the year, which, as we indicated up front, guidance hasn't changed, and Steve made the reference that those are committed, and we will see sequential margin improvement in the H2 off the back of that. Thank you. Thank you. We currently have no further questions for today, so that concludes today's conference call. Thank you all for joining. You may now disconnect your lines.