Earnings Call: Q3 2018

Nov 1, 2018

Earnings release

Hello, and welcome to the Quota Q3 Trading Update Call. Throughout this, all participants will be in a listen only mode and after the survey question and answer session. And just to remind you, this call is being recorded. So today, I am pleased to present Steve Foote, Group Chief Executive and Chez Maven, Group Finance Director. Please go ahead. Thank you everybody. Good morning to all, and thanks for joining the call. Usual, I'm with Jazz and Congress as well as well. A quick introduction from me as usual and then we'll take your questions. The main takeaway from today's update is that after a strong first half, we see continued momentum through the 3rd quarter performance has been very much in line with our expectations and the guidance we provided back in July and at the outset of the year. Constant currency sales were up a healthy 4.5% for the core businesses in the quarter, which is bang in line with 4.7% year to date. So trading well. This growth is driven by mix and volume improvements and not by raw material pricing. As a reminder to you all, we're in natural economic, not petrochemical economics. There's no raw material inflation in our numbers. This call is driven by, so this is with a pin by record levels of innovation with NPP of 28.4 percent of total sales and a strong result in our consumer businesses. So both personal care and life sciences, and margins have remained solid with the group's year to date margin slightly ahead of last year. So just turning briefly to each of the sectors, In Personal Care, another very strong performance was up 4.9% and 7.8% year to date, growth is exactly in line with what we said in July. We recall a comparative period was when we started to see a recovery in sales, some sort of comps too. We continue to see 4% to 5% is more sustainable growth going forward and growing 1.5 times the market. Is our ambition for the business in the near term. We saw healthy demand across all three segments led by beauty actives. Underlying trends were consistent with what we've seen all year, with multinationals growing alongside our region and local customer base. So all customer categories growing well. All regions were ahead too with Asia and North America being the strongest performers, and Latin America continued its recovery. However, I think most impressive performance in Personal Care has been the NPP pipeline double digit sales growth again this quarter. We have an excellent pipeline and we're doing very well with our clever products. Life Sciences was the pick of the core businesses and a very impressive performance. Constant currency headlines sales were 8.5% in the quarter, 9.3% if you exclude the exited North American API business. The API exit impact was smaller in quarter 3. And to remind you, quarter 4 is the final quarter were impacted and by the contract exit. I will say probably about 4% sales headwind in my sciences in quarter 4. As expected. Healthcare is especially strong as we continue to see good demand for high purity excipients for complex drug delivery systems we benefit from further expansion into new drug markets. So it's all about drug delivery and health care. Crop is a little slower, which mirrors recent published data from the majors that become due to our performance sector with growth in small customers. Incotec had a good quarter as we continue to invest in that business. And Platts Impact is still early stage, but with sales development actively supported by Croda's global sales team now, that will help to drive sales going forward. Performance Technologies was up 1.8% in the quarter, in line with growth of 1.7% year to date. Sales growth is less of a reflection of how this business is following as you know, and we continue to see good pricemix improvements there. Volumes declined, reflecting our ongoing efforts to share the low margin business and NPP began to increase as expected. So lots of positive trends, not least good demand for bioavailable lubricant additives. As customers look for ways to improve the sustainability of their products by using kroger ingredients. So over and above all, this progress will continue to implement initiatives to The growth, the biosurfactants plant is up and running in North America. This will support the growth of our retail range and meet the increasing demand from our sustainable products. And as you'd expect, there's lots of innovation across the business, which are major product launches in these segments, which will start to benefit from 2019. Our pipeline of new opportunities is very exciting. So to say another strong consistent quarter of growth is encouraging to see ongoing momentum in our consumer businesses, further value over volume, progressive performance technologies and plenty of rich innovation across the group we're on track for the full year, enough for me. And let's take your questions now. Thank you. So ladies and gentlemen. If you have a question, please can you press 0 and then one on your phone keypad now in order to enter the queue. And then after I announce you, just ask that question. And if you find that question, has been answered before it's returned to speak. Just press 0 and then 2 to cancel. And there'll be a brief pause while the questions are being registered. Okay. I see our first question is from the line of Tom Rigglesworth at Citi. So, Tom, please go ahead. Your line is now open. Thank you very much. Good morning, Steve. Good morning, Carlos. Firstly, with regards to, could you just provide a little bit more color around how the existing growth might go, proceed going forward? And is that going to be a margin positive for life sciences? Is this just a one time effect kind of running through the system? Secondly, in Performance Technologies, could you give us an indication of what the growth would be ex bottom slicing? So how do you see the kind of growth in the other businesses? Going forward. Yes. Okay. I mean, so existing growth can mean health care and cock care, but I think your question is around health care, if I'm correct. On health care side, I mean, we've been very clear this year to strip out the impact of the API car contract. So everything else you should see as normalized growth. And we screen pretty well in health care for high single digit sales growth is how we should look at that. Going forward. And if you look back to look forward, but that's still 3 quarters of beta at those levels as well. We just had, we've had in quarter 1 quarter 2, more API sales than we've had in quarter 3. So it sometimes matters to be on the right front. No, it is the fastest growing technology in the group, but none, and we've got some good technologies there. And this moved the drug delivery is gathering pace, and we're really pleased with that. So we're tuned into that and we expect that to grow. And then as a reminder, on the back of that, we've just put a big capital expenditure through on our plants in the U. S. To just future proof capacity plan for those products. That comes on stream in the not too distant future. So, you know, we've got plenty of capacity to grow as well, which is good. Before I start all these points around too, around 2% in performance technology run rates. If I look at stripping out de marketing, and we'll see where that goes. But the most important The most important thing in Performance Technologies is the quality of the business. And it's about innovation led growth. So it's margin improvement supporting sales growth as well. Compounding effect to drive the profit there. And I'll just pass to Joe who's going to answer those comments. Yes, just another thing worth noting is that first half year, Performance Technology is up just under 2%. That was about -8 volume at about plus 10 price mix, primarily mix caused by the de marketing program. That's about halved in third quarter because we started this program in the third quarter last year. So we're about minus 3 on volume and about plus 5 on price and mix. So the same 2%, but you can see obviously as we lap that the demarketing impact will have less of an effect and you'll start to see the reported sales number or the constant currency sales number for Performance Technologies should start to tick up as we go forward towards next year. Very helpful. Thank you. Just as a follow-up, Life Sciences growth for next year, you can do, what, 4 to 5% is a is a reasonable base of assumption for 2019? We think it'll probably be a little bit more than that. We expect it to be we screen in life sciences without car. And if you look at the run rates this year, it's you know, mid, high single digits mid to high sort of 6%, 7%, 7%, something like that, is where we would have that So, yeah, we knew we were very pleased with 2018 performance and see, no reason why I can't continue next year. Okay. Very helpful. Thank you gentlemen. Thank you. Okay. Just to remind all participants that if you have a question, please press 0 and then one on your phone keypad now. And there'll be a further pause while any other further questions Okay, miss Jason. There seems to be no further oh, further questions in the queue. So can I please pass it back to you for any closing comments? Okay. Sorry. Can you please repeat the closing comments? Jeremy, Steve? Sorry. Just to see if you have any further questions, so back to you, please. Okay. All right. And yes, well, so you're seeing the update from the group. We're pretty pleased with the performance. We're seeing a slowdown in growth in quarter 3. What we've seen in the first half. So we are we're ticking off pretty well. So we'll stop there and we'll see you again in February. Okay. This now concludes the call. Thank you all very much for attending. You may now disconnect. Can you check? Because I think there might be people trying to ask questions. I've got a couple of messages from a couple of analysts. So I think appears to be a problem on the line. Okay. Can you give me the analyst's name so I'll see if I can identify them? Walsh Evans. Okay. Wilshire, if you can press star and then 0, and I'll identify you and open up your line. And also, Mr. Alexander, there's actually quite a few Yeah. Okay. If it comes to you, then just hand it over. Andrew, hi, Andrew. Please go ahead. Your line is now open. Okay. Good. Excellent. Thank you for, for opening the line. So morning to everybody. Just a couple of things. Firstly, just trying to work through on the margin side, the moving parts of the second half and just check that we're sort of on plan. So the the losses from plant impact and the first contribution from Atlas Point, which I guess is for about 4 months. I'm just trying to think how those numbers affect the EBIT for the second half. And then when you say the headline in your outlook statement that you're on track, I guess that's an endorsement of consensus. I wanted to check that. And then the margin growth comment, she says slight, and I think in the past, you've defined slight to sort of 50 bps or so, and I just wanted to check your definition for saying. Well, that's just in the first one. The other thing, slight is what you say. It's a little bit more than flat. So the definition hasn't changed. I mean, what's important for the group is PBT, as we look at PBT again consensus and we feel very with the year end. We'll just we will leave it at that. We're not here to give profit forecast, but we've seen October and we've got 2 months left. And effectively, we've got the orders in the system now for the rest of the year. So we're comfortable to make that statement. So we're fine with that. Jessie will go into the living transfer at this point in the middle. Sure. Good morning, Andrew. So In terms of plant impact, I mean, it's mostly a cost to us this year, the sales that we picked up from the acquisition of pretty low. So we've been guiding across the 9 months that we'll have owned it to the year end that we were expecting a loss of about 1,000,000 to 1,000,000 on that. I think that would be near a 1,000,000, and that's simply a function of lower sales. Than we had anticipated. But, what we've seen clearly, we've said that we've taken out the local sales force. We've integrated that now into the Croda selling for the selling network, and we really like the technology that we've found in that business. We're very excited by it. So we do have a strong view about the performance about significantly reducing the loss next year and then getting into profit. So we like very much the technology we've seen, but there will be a slightly larger loss in this year. Having said that, that doesn't change out to you around our expectations or consensus because clearly the rest of the business is performing very well. So we're talking about very small variations in one acquisition being offset by the strength of the rest of the business. So, yeah, I'm comfortable with where people are expecting us to be and where we expect it to be. In terms of the eco plant, the biofactant plant at this point, yes, so effectively contributing from October. So 3 months, obviously, the initial focus is around transferring all of the downstream products that we make, all of our cock slips from the petrochemical raw material onto the bio raw material. So that's our focus over the next 3 months. We get a bit of launch and pick up on that, which will be worth a small number of 1,000,000 of pounds I would expect next year. We'll get a pro rata share of that. So again, just a relatively small contribution this year, but the real exciting part with the Eco Plant comes from getting customers, enabling customers to be able to launch green based products. And we have those pulls out now with the market. We have the range launch now. So and we have our very first orders of people deliberately buying green. So that won't be meaningful this year. But as next year develops, that's all we'll be working to develop the new the growth in sales, which is really the core reason for building that plant. Margins, what we've said is that we're looking to deliver mid single digit sales growth overall in the core business on a constant currency basis and to support that by the increase in margin. And clearly there's some margin dilution in, life sciences. This year caused by plant impact, And we're happy with the broad margin level of Personal Care. And so the growth in margin is really function of the improving mix and the value of the volume strategy in Performance Tech. And that's what leads us to conclude with them. The return on sales overall for the year should continue slightly ahead of last year. Does that help put the moving parts together? It does. That's great. And just just just one follow-up. On the on the trajectory for 2019, do we assume that those losses impact are broadly eliminated in 2019, or you still think there'll be a small loss? I think there still needs to do that work. Our intention when we acquired in March was to get the business to breakeven in 2019. That's still our intention. Clearly the actual sales we have within that business are low. So we need to do more work around how quickly we can bring the new products to market. But we should see a at least a significant reduction in that level of loss, which, as I say, even a GBP 500,000,000 is not significant in the context of the group, but it is a little bit worse than what they're anticipating. Yes, I think just on flatness, Clive, Andrew, I mean, we're really pleased with the technology. It's great technology. And, you see, we not know about due to the governance code changes that we have to make a release last week around the fact that we're making some people redundant, but that was all part of the plan. So it's going getting recruited salespeople in charge of selling the product and we know what happens when they do that. So we're in a very good place our intentions to get into as close to breakeven as we can next year. So there should be a benefit from where between the trajectory and it's going to be a benefit from the trajectory from what we've seen this year. It's all about sales growth now capturing themselves because we've got the cost base where no one's at. We expect sales growth to come through to the cost of next year. I think it's also worth putting it in the context. And we've done a technology investment over the last 12 months. Why are we calling this one out? Because I guess it's an unusual technology investment for us. Normally, we're buying a business with a handful of scientists. So the costs that we run-in the 1st couple of years, while we develop the business are off the radar really, we just call out the pump impact because we acquired good about sixty people in that business and obviously no significant sales. So that's why the plant in Babylon stands out, but all the other technology acquisitions are working well, but you just don't see the costs within the overall group results. Got it. Thank you very much. Okay. So we now go to the line of Lars Alexander. I'm just bringing them if you wait one second. If you wait one second, we'll just bring the lines in. Okay. I'm afraid, Lawrence's line seems to have dropped out. If anyone else has any further questions at this stage, please do press 0. Okay. That seems to be it. I do apologize. So please back to you for any mhmm. Here we've got we seem to be getting a few questions into Conversea from, from the sell side. So do you want us to bring the question out and answer it? Yes. If if you could, please. I do apologize if you could, and I'll see if I go out and do it this day at 10. And so please read out the questions. Okay. This is from Paul Walsh. Talking about the personal care, Steve, can you discuss group in Q3? Has anything changed, what are you expecting from here? And any noticeable slowdown in China? Well, I mean, because of the care, we're in very good shape. If you look at the run rates, we're exactly the same as they were in quarter 1 and quarter 2. There's no reduction in run rates The if you look at 2017, the first half of twenty seventeen sales were about minus 2% in Personal Care and the second half was about plus eight And then, and now what you're seeing is we're lapping the anniversary of, of some of the, the strong the weak sales growth. So we're coming back into strong sales growth from quarter 3. If you remind yourselves, about a year and a half ago, we had 2 issues in Personal Care. One of those multinational sales growth was pretty anemic slovish, you would say. And also the formulation business was broadly flat. Both of those have been corrected and both of us are in very good shape now. We start, we organized about 18 months ago, We've got 3 managing directors now running the active effects and formulation businesses. They're all in very good shape, and they're all healthy and growing very well. So we're really pleased with that. So the effect of a move from 7%, 8%, 9% in first half this year to 4.5percentto5percent4.9percentquarter3 is purely down to strong comparators in, in the quarter 3 last year. That's where we started. So we're just lapping the anniversary, but the business is in very good shape, really pleased and excited. And I think the other thing I would say with Personal Care is you can see this flight to luxury in Personal Care is continuing. And you can read that into all of our customers' numbers that have been printed in the last few days. The strong growth with a number of them and that bodes well. So when you've got your customers growing well, our leading indicator is around the customer growth and also around our pipelines and new projects are, are very important. I would say the big step up over the last, 2 or 3 quarters has been the strength coming back in the multinationals as well. We've got very good regional local delivery through the smaller customers. But, the multinationals now is getting very exciting for us. And they are coding in 2 or 3 significant global product launches now with product ingredients and that's great. And we can't say too much about individual customers, but less material and overall boost and help continue the sales growth through into 2019. So first one came in very good shape. We really can't complain what's going on. The China, I mean, the China generally for the group is very strong. We looked at each of the quarters this year, the quarter 3 was the best quarter of the year. So far, we've had double digits sales growth in quarter 3 in all three of our businesses in our club businesses. So there's no slowdown in chai with anything. It's accelerating. Again, a reminder to you all about China is, for the group, we're in small market share positions. So we're not really buffeted by macro or trade wars. Our job is just to give customers what they want and the demand for that is increasing in China as we find new customers. So double digit sales growth across all our core sectors in China in quarter 3. Hugh, I'll continue. I've got several other questions that have come through. So we do. Is one of them from David Simmons at J. P. Morgan? No. It's not. Okay. Well, I've got him. So can we take him first? So, David, your line is open. Please go ahead. Yeah. Hi. This is actually, Chetan Udeshi from JP Morgan. So, Carmen, you might already got because it's been a bit confusing with this call today, whether we are in or out. But the question I had was maybe Steve you know, can you give us some sense of the split in terms of personal care growth, in terms of volume versus mix and price? I think you had sort of 5% ish kind of volume growth in first half. So maybe it will be useful to get some sort of sense in terms of volume pricemix there. And maybe Jazz, a question around the finance expense line in the P and L for this year, because I think the startup of the biosurfactant plant has been, plant has been delayed. And so should we expect maybe the interest line to be lower this year than maybe what consensus has it or what was thought to be the case previously? And maybe any updated thoughts on how we think about the FX impact for this year now given the pound has probably moved back, from first half levels. Thank you. If you wait one second, if I could please ask you to repeat that now, your line is now open. Jazz and Steve. Thanks. Thank you. Okay. Apologies for the problems around this morning. So on personal care, the constant currency growth of 5% roughly in the third quarter is a pretty equally split between price mix on the one hand and the volume on the other. Is very consistent with what we saw in the first half of the year. And the price mix is very much about mix and innovation driven. Improvement. We haven't seen material changes in raw material prices that have needed recovering. Obviously, if we see a change in the individual component that we will go and recover those increases in cost. But fundamentally, it's about improving the mix through innovation and new products. Rather than being a raw material price recovery story. So I think quality of both wise, we feel very very positive about that. And the raw material market, while there are specific pockets of increases overall has not been particularly difficult or aggressive. In terms of the interest line, in the first half year, yes, we undoubtedly had saving because we're required to capitalize the interest on the ECO plant during construction. Because obviously it's a major project for us. We wouldn't normally capitalize interest, but on very large projects, so clearly that is one. Of the only ones, then we are we will capitalize on the interest. We carried on doing that through the 3rd quarter, but clearly we stopped capitalizing the interest on the 4th quarter. The impact of that is the interest line goes up in the fourth quarter because obviously we have the debt. But instead of to the balance sheet, it starts going to the P and L from the fourth quarter. So the interest line ticks up from the first half run rate that you saw for just half of the second half. And then as we go forward into 2019, On the FX side, yes, I mean, right now, as we note in the statement, the translation impact is, is softening. You can see that in the first half, year, we had 3.6% growth for the group sales in constant currency. But we're down 0.6%. So we had about a 4.2% currency impact. You can see that softened to about a 0.5% impact. For the third quarter. So clearly, if currency remains wrongly where it is at the moment, then we'll have a small adverse impact on the fourth quarter, but clearly, it's becoming much flatter. Chetan, does that deal with your questions? Yes. Thank you very much. Okay. If you could read out the other questions, that would be, great, please. Yes, sure. So the next one is from Martin Evans at HSBC. Can you please comment on your expansion into regional drug markets such as India, what are the opportunities here and which illnesses are being addressed, including presumably oncology? Yes. Thanks, Martha. Yes, I mean, India is one of the worst target markets for our health care business. I think the basis the big issue in the past has been to overcome the legislation barriers that you have to declare a lot of information around the product and then we've been reluctant to do that for different reasons, more on intellectual property than anything else. Although we manage the regulations have been more recently, which has allowed us to enter the market. So we're starting to see good growth. I think it's broad based growth. It's delivery systems for different type of group George, it is oncology, then as you probably all know, there's some, it's a big base in India for pharmaceuticals for generic manufacturers, particularly So we have products into lots of different applications ranging from high care drugs to chronic leukemia drugs to cancer drugs as well. So, in lots of different areas. And then the big thing we're seeing is we're penetrating new markets like like India and China to follow the same, the same legislation barriers, and we're overcoming those as well. So we expect China, which is very very small market for healthcare business to expand. But I think the big trend in healthcare is around, the move to biologics and move to if you like bulkier molecules, which means more difficultly and stabilizing them. So they're looking at delivery systems that can, can be cuter and clever at stabilizing these systems. And we've got we've got a cocktail of these, in our makeup. So, we, yeah, we can, we can deliver that. So we've said we've seen we're increasingly becoming the go to company for, for these type of drug companies. If you don't mind, because there's some problems here. I think if we can ask ourselves, are there any other questions that we can't get through the normal system? Okay. The next one is from Gunther Zechmann at Bernstein. You're talking about margin expectation for 2019. It seems like all divisions should expand margins. Personal Care benefiting from the Atlas Point mix improvement life sciences from the turnaround in plant impact and Performance Technologies from de marketing moving towards 20% Can you give a right order or give numbers, please? Yes, it is. Okay. Hi, Gunther. The yes, look, I think that's that's a fair view around the performance in each of the cases. Clearly, the ECO plant actually is a benefit to all three sectors. It's not just a personal care business. We've got home care in there and we've got crop and some other business as well. So that benefit will be spread. As I say, in 2019, the eco benefit will be limited a small number of 1,000,000 of pounds is what we're expecting, because that pickup is mostly from the margin that we pick up from, but basically making a feedstock that our suppliers used to make and avoiding the delivery costs that we pay to get that material historically from the Gulf of Mexico up to Delaware. But there should be a limited impact but the exciting part is clearly when we can get the additional sales from green products in the eco space. But you're right, we should then expect to see a reduction in the loss around plant impact. And we'll see the continued benefit of demarketing, although I think we're although we will always do some demarketing in Performance Technologies, I think we are kind towards the end of the of the main impact So now we're turning our attention to improving the innovation pipeline, which is traditionally sort of lagged behind the other 2 sectors in terms of NTP level. So that's more of a medium term effect, but we've got some exciting projects in there, which we think should start to come through. So yes, overall, we would be positive around the outlook for margin next year. Not going to put the rank order or my own numbers around that at this point, and I'm sure you understand why. And just following up again, Jes, from Gunther, you please give any color on cash generation and balance sheet? Sales update in the third quarter. But yes, as you'd expect now, we had spent most of the CapEx around the ECO plant in the first half year there's probably a residual in the third quarter of maybe 5,000,000 spend going through. So what you'll see in the second half year is improving cash generation driven by lower CapEx. We expect to return to our more typical CapEx level, round about 1.5 times depreciation. Probably about 1,000,000 to 1,000,000 sterling. So that clearly is going to be the key driver to cash generation improving. That's happening as we speak because we finished the main CapEx and that will return closer to its normal business of strong cash generation and therefore reducing debt and therefore optionality around other technology and bolt on acquisitions that are of interest? Or should we return cash to shareholders as per our policy? So, yeah, that's, that's very much the direction of travel we have at the moment across those two choices. Okay. The next one we have is from Isha Sharma at MaineFirst. Is it fair to say that Performance Technologies is a bit more cyclical than other segments? Do you see any impact a little bit more cyclical than personal care and life sciences, but in a very small way that if I look at the trading in business. We're not really booked it by anything, macro, significantly macro. We tend to look in Europe for that when we say the numbers out from a lot of other industrial companies. And you're holding up pretty well from what we can see in pharma technologies. I think as I said, the priority focus is is around and the priority focus in the last 2 or 3 years is around specializing the business. And when you specialize it, so you're really looking at taking it more to a specialty and really truly specialty chemical model, then you're actually derisking the cycles. Because you're looking at really good quality, good quality innovation in fast growing niches. So we won't expect to be too much by everything. It remains to be seen whether we do, but we're not seeing that in our order intake or in our activities, at the moment. You probably know better than we do about macro for next year, but, I mean, we're in a good place. And, you know, it's a trading month and certainly, PBT, we're interested in that business. And it's less looking at the top line. It's more looking at the bottom line. So it's a combination of sales growth and margin improvement that drives the performance performance and holding for the group. A couple of questions now from Laurence Alexander at Jefferies. In the ag sector, there's order timing and market issues in North America and new product mix support a Slingshot effect with accelerating sales in 2019, or how is second half 'eighteen shaping up and the second one on industrial chemicals should sales stabilize in 2019 or will bottom slightly continued, not sure if that's industrial chemicals or performance technology. I'll be more battering forward. Okay. I'll do the crop 1, and I'm testing the industrial kind of as well. I mean, crop is very good for Croda. It's in good shape, very good shape. First half, very strong quarter 3, slightly, just below last year in quarter 3. But quarter 4 looks good. What we can see in crop care. And if you look at it, you're always going to get some, some changes in the quarter in crop, more so than any other business that we've got. Because of just the nature of crop. But we're in the Northern Hemisphere and the Southern Hemisphere as well. And if there's a drought in one part of the world. There's probably something else going on somewhere else and it sort of nets out, but pound for pound, if I look every year in the last 10 years, it's grown. A year, and it will grow by the end of this year. As to the quantum in quarter 4, that's difficult to say. As to the quantum in next screened for well, I'll say the screens were probably mid to high single digit sales growth. So the Life Science business in itself has has a very strong driver in health care. They've got a very strong driver in crop. I think the interesting thing for us is the MNC businesses developed here today. Have grown very well. So the big 5 or 6 companies, innovation levels are high, which is something that we really do look at. But we're also picking up the faster growth rate you'd expect from Kroger is a small and medium sized customer, so the Tier 2 and Tier 3 customers. And we're capturing growth there. Background of the world as our crop care sales team starts to focus on new customers. So crop care is very good place. Who knows whether, macro will improve the prop care next year, but in many ways, we're still very much micro driven in prop care as well. We'd expect that to come back growth to continue. No sign but slowing down. Okay. And then on the, on the Performance Technology And Industrial Chemical side. So as we said, Performance Technologies demarketing impact of a couple of percent on the top line growth, and that will that will have less of an impact as we go forward now as we've locked the program starting in the second half of last year. And on industrial chemicals, this is, I mean, we always say that and the reason we strip our core business separately is that we're happy to see these sales number day down. In industrial chemicals, a significant chunk of that business is byproduct that we produce when we're producing main products for the other 3 sectors. And also there's some tolling contracts in there, which over time we are reducing. So we're quite comfortable seeing industrial chemicals go down. As we find ways to make less of the byproducts by changing the chemistry or as we exit, tolling arrangements that have been historical. So the general direction of travel on industrial chemicals is likely to be continued reduction, but it has no real impact. And generally, we make more profit if we are making less industrial chemicals. So that's the direction. There will be a bit more industrial chemical volume coming on from the ECO Plant because one of the there is a byproduct on that screen, that is produced in the ethylene upside by patches. So there might be a little bit of noise as the ECO plant kicks into life. But generally, the direction of travel is to try and reduce the proportion of sales in the in the byproducts and tolling business in IC, and you can expect that to continue. The next one is from Charlie Webb, Morgan Stanley. It's the first time in a while we've seen you comment on a large NNC product launch. Can you please remind us what scale of contribution you would expect from these type of launches? And should we expect 4 of these to come? Well, be surprised to know, maybe not surprised to know that we can't talk about individual customers in any particular farm. We're contracted to them, but we're delighted with 1 or 2 one big one that's been launched through, through probably a 3 6 months in launch now, and it's been out in the market for 6 months in the 12 year globally. And that's still rolling out, and it's got another 12 months to roll out top 5 brand in the world. And it's been been monitored by Croda ingredients and managed by the R and D laboratory in Croda. So we're delighted with that. And our relationship, as you'd expect, with that customer is is outstanding based on that. So a lot of that has gone in marketing with our customer there. And we're also starting to see 1 or 2 more coming through at the advanced stage of pipelines as well. I mean, if you look back at the history of Croda, I've been in the company 28 years and over the last 10, 12, we've always we've always been looking for 1 or 2 product customer launches like this. And you normally get them, you only get 1 every 2 years. And it looks like they're starting to come back now. Think the bigger part of the quarter is it's getting our trust back with the MMCs and the growth is back to come back. So you can see this growth coming through our customers now in MMCs. And that's really for us because they're innovating again, and they're doing a lot of innovation and we're starting to pick up good growth as a consequence in that. Okay, I think this is possibly the final one and it's from Rick King sales at Berenberg. The first one is moderation in crop protection, seasonal or other other factors at play. And what is the growth trajectory we should expect here in 2019? And the final one is, can you please quantify the NPP growth in performance technologies? Well, I mean, the first one, we answered it really. It's about crop. There was a question before around that. There's no moderation in prop. Don't worry about quarterly fluctuations. You know, yesterday, cropping is in the positive and strongly positive it will be by the end of the year and those out, it will be next year. Don't say any problem with that. It's very limited to the macro effect. There is seasonality. You're always going to get seasonality here, but our big faces in crop are in geography terms in Western Europe, North America and Brazil. And they're the 3 big areas. Clearly, we've got opportunities to expand in Asia, and that's what we're trying to do. So If you look at the 3 major regions, they balance each of that pretty well, but normally the innovation power throughout R&D over the last few years, it takes us forward and ahead of ahead of industry average growth rate. So we've always we've seen now for it has been for 10 years that we've outperformed the industry. So it's a really good business to crop care and expect that to continue. Traditionally, we've had about 40% NPP in Personal Care, about 30% life science, but beyond the 20% in Performance Tech. Nice to see a Personal Care moving well ahead of 40 now. On Performance Tech, we've got a big medium term focus on making sure that we have richer innovation coming through, and therefore can drive that NTP number. Because it's one of the things that support margins in Performance Tech. So we remain a bit below the 20% level, But it's we've seen some encouraging movements in that, supported, of course, by our acquisition of Ironphase, in December last year into the Smart Materials area, which is a very innovation rich business, which we are in the process of developing through our credit sales network. So the key for us in the medium term having done the de marketing in the short term will be to drive that innovation pipeline and performance tech. And get the innovation that was up towards the consumer businesses. That's the end of the questions from our end. Okay. Well, in that case, this now concludes today's call. Thank you all very much for attending, and you can now disconnect.