REG - Croda International - Results for the six months ended 30 June 2025
Tue 07:00
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RNS Number : 8901S Croda International PLC 29 July 2025
29 July 2025
Results for the six months ended 30 June 2025
Good sales growth with FY25 outlook unchanged; delivering on our plan to grow
earnings and improve returns
Croda International Plc ("Croda" or the "Group") the company that uses smart
science to create high-performance ingredients and solutions that improve
lives, announces its results for the six months ended 30 June 2025.
Highlights
Statutory results (IFRS) Adjusted results
Half year ended 30 June H125 H124 change H125 H124 Constant change
currency change
Sales (£m) 855.8 815.9 4.9% 855.8 815.9 7.3% 4.9%
EBITDA (£m) 198.5 184.5 11.0% 7.6%
EBITDA as a % of sales 23.2 22.6 - 0.6ppts
Operating profit (£m) 94.4 114.4 (17.5)% 146.9 135.6 11.9% 8.3%
Operating profit as a % of sales 17.2 16.6 - 0.6ppts
Profit before tax (£m) 85.5 106.1 (19.4)% 138.0 127.3 11.9% 8.4%
Basic earnings per share (p) 43.8 57.2 (23.4)% 72.2 68.8 - 4.9%
Interim dividend per share (p) 48.0 47.0 2.1%
Free cash flow (£m) 34.2 122.7 - (72.1)%
Net debt (£m) 580.1 507.9 - (14.2)%
Steve Foots, Chief Executive Officer, commented:
"Our performance in the first half was in line with our expectations at the
start of the year. Higher sales in all businesses and regions reflect improved
volumes in Beauty Care and Crop Protection, as well as another period of
strong growth in F&F. Our actions are helping us navigate a challenging
environment, simplifying and modernising our business, and supporting our
efforts to enhance margins. We have identified a further £60m of cost
savings, taking the total to £100m of annualised savings by the end of 2027.
There is much more to do but our strategic and operational focus is creating a
stronger platform for further progress and our outlook for the Full Year is
unchanged."
Good sales growth in all three businesses
· Group sales +7% at constant currency driven by higher sales
volumes, comprising:
o Consumer Care sales +7%, benefitting from higher sales volumes
§ Beauty Actives +1%, Beauty Care +3%, Fragrances & Flavours (F&F)
+17%, Home Care +7%
o Life Sciences sales +9%, growing in all regions
§ Seed +17% and Crop +12% with improved demand from multi-national customers
(MNCs)
§ Pharma +5% with continued biopharma growth and slow recovery in consumer
health
o Industrial Specialties sales +4%
o Q2 sales remained 6% ahead of prior year at constant currency but were
sequentially lower than Q1
· Adjusted operating profit +12% at constant currency
o Adjusted operating margin 17.2% (H124: 16.6%)
§ Supported by higher volumes and cost savings initiatives; partly offset by
FX and price/mix
o IFRS profit before tax of £85.5m (H124: £106.1m); adjustments included
£27.3m impairment charges
o Adjusted profit before tax up 8% to £138.0m (H124: £127.3m); equivalent
to £142.5m at constant currency
· Resilient balance sheet
o Cashflow reflected lower capex and higher working capital with inventory
and debtors adverse
o Leverage ratio 1.5x (H124: 1.4x), well within our target range of 1-2x
EBITDA
o Dividend increased 1p to 48.0p (H124: 47.0p), maintaining record of
progression
Delivering on our plan to grow earnings and improve returns
· Driving sales growth
= Benefitting from proximity to local and regional (L&R) customers who are
continuing to win share; Consumer Care sales to L&R customers +11% at
constant currency
= Ongoing focus on innovation; New and Protected Products (NPP) + 3% at constant
currency
= Driving improved returns from portfolio following recent period of peak
investment; sales of ceramides, acquired in 2023, were ~50% higher in constant
currency
· Increasing efficiency
= Good progress with operational efficiency programme; contributed ~£10m
benefits in first half year; continue to expect £25m pre-tax benefits this
year
= Increased annualised cost savings target by £60m to £100m by end of 2027
principally by driving efficiencies in production, procurement and enabling
functions
= Initiated review of the Group's production and distribution assets as part of
actions to optimise capacity
· Improving returns
= Investment intensity and capex moderating as remaining growth projects are
commissioned
= Improving working capital management, targeting reductions in receivables and
inventory days
= Applying capital allocation framework to improve investment discipline and
returns on capital
Outlook
Whilst we are mindful that the unpredictable political and economic
environment continues to create uncertainty across our markets, the Group's
performance was in line with expectations in the first half of the year, and
we continue to expect to deliver Group adjusted profit before tax between
£265m and £295m in full year 2025 at constant currency.
Croda will provide an update on third quarter sales performance on Thursday 16
October 2025.
Further information:
An investor presentation will be available via webcast at 0900 BST on 29 July
2025 at www.croda.com/investors (http://www.croda.com/investors) .
Investors: David Bishop +44 7823 874428
Reece De Gruchy +44 7826 548908
Media: Charlie Armitstead (FTI Consulting) +44 7703 330269
Notes:
Currency translation impact. Constant currency expectations are based on the
Group's average exchange rates through 2024 which were US$1.28 and €1.18.
The US Dollar and the Euro represent approximately 65% of the Group's currency
translation exposure. We estimate that the average annual currency translation
impact on adjusted operating profit is £1m per Dollar cent movement per annum
and £1m per Euro cent movement per annum. H125 adjusted operating profit
was adversely impacted by £4.8m and adjusted profit before tax was adversely
impacted by £4.5m due to strengthening Sterling. Assuming 1 July 2025
exchange rates for the remainder of the year, we estimate translation would
have a further £5m adverse impact on Group adjusted profit before tax in the
second half of the year.
Transactional currency impact. In addition, the Group is exposed to
transactional currency exposures which we seek to mitigate through currency
hedging, pricing and optimising our supply chains. With the strength of
Sterling, H125 adjusted operating profit was adversely impacted by £6.7m
(H124: £1.2m) from transactional exposures.
Alternative Performance Measures (APMs): We use a number of APMs to assist in
presenting information in this statement. We use such measures consistently at
the half year and full year, and reconcile them as appropriate. Whilst the
Board believes the APMs used provide a meaningful basis upon which to analyse
the Group's financial performance and position, which is helpful to the
reader, it notes that APMs have certain limitations, including the exclusion
of significant recurring items, and may not be directly comparable with
similarly titled measures presented by other companies.
The measures used in this statement include:
· Constant currency results: these reflect current year performance
for existing business translated at the prior year's average exchange rates.
Constant currency results are the primary measure used by management to
monitor the performance of overseas business units, since they remove the
impact of currency translation into Sterling, the Group's reporting currency,
over which those overseas units have no control. Constant currency results are
similarly useful to shareholders in understanding the performance of the Group
excluding the impact of movements in currency translation over which the Group
has no control. Constant currency results are reconciled to reported results
in the review of financial performance below. The APMs are calculated as
follows:
a. For constant currency profit, translation is performed using the
entity reporting currency before the application of IAS 29 hyperinflation and
any associated one-off foreign exchange gains or losses;
b. For constant currency sales, local currency sales are
translated into the most relevant functional currency of the destination
country of sale (for example, sales in Latin America are primarily made in US
Dollars, which is therefore used as the functional currency). Sales in
functional currency are then translated into Sterling using the prior year's
average rates for the corresponding period;
· Adjusted results: these are stated before exceptional items (as
disclosed in the review of financial performance below) and amortisation of
intangible assets arising on acquisition, and tax thereon. The Board believes
that the adjusted presentation (and the columnar format adopted for the Group
income statement) assists shareholders by providing a meaningful basis upon
which to analyse business performance and make year-on-year comparisons. The
same measures are used by management for planning, budgeting and reporting
purposes and for the internal assessment of operating performance across the
Group. The adjusted presentation is adopted on a consistent basis for each
half year and full year results;
· EBITDA is Earnings Before Interest, Tax, Depreciation and
Amortisation, which is adjusted operating profit plus depreciation and
amortisation;
· Adjusted operating margin: this is adjusted operating profit
divided by sales, at reported currency. Management uses the measure to assess
the profitability of each sector and the Group, as part of its drive to grow
profit by more than sales value, in turn by more than sales volume as set out
in the Group performance section below;
· Net debt: comprises cash and cash equivalents (including bank
overdrafts), current and non-current borrowings and lease liabilities.
Management uses this measure to monitor debt funding levels and compliance
with the Group's funding covenants which also use this measure. It believes
that net debt is a helpful additional measure for shareholders in assessing
the risk to equity holders and the capacity to invest more capital in the
business;
· Leverage ratio: this is the ratio of net debt to EBITDA
adjusted to include EBITDA from acquisitions or disposals in the last 12 month
period. Calculations and reconciliations are provided in the five-year record
of the Group's Annual Report. The Board monitors the leverage ratio against
the Group's debt funding covenants and overall appetite for funding risk, in
approving capital expenditure and acquisitions. It believes that the APM is a
helpful additional measure for shareholders in assessing the risk to equity
holders and the capacity to invest more capital in the business;
· Free cash flow: comprises net cash generated from operating
activities adjusted for the cash effect of exceptional items less net capital
expenditure and payment of lease liabilities, plus interest received. The
Board uses free cash flow to monitor the Group's overall cash generation
capability, to assess the ability of the Company to pay dividends and to
finance future expansion, and, as such, it believes this is useful to
shareholders in their assessment of the Group's performance; and,
· New and Protected Products (NPP): these are products which are
protected by virtue of being either newly launched, protected by intellectual
property or by unique quality characteristics. NPP is used by management to
measure and assess the level of innovation across the Group.
Croda International Plc
Group performance
We use a number of APMs to assist in presenting information in this statement
which are defined on page 3. All comparisons are with H124 unless otherwise
stated.
Group performance summary
Group sales increased to £855.8m (H124: £815.9m), with sales volumes up 11%,
price/mix down 4% (approximately three percentage points of which was due to
price), and a 2% headwind from foreign exchange translation, leading to
reported sales up 5%. Sales were higher in all three businesses, up 7% in
Consumer Care, 9% in Life Sciences and 4% in Industrial Specialities, all at
constant currency. Sales of new and protected products (NPP) grew 3% at
constant currency and were 33% of total sales (H124: 35%).
IFRS operating profit of £94.4m (H124: £114.4m) included a charge for
adjusting items of £52.5m (H124: £21.2m). This included impairment charges
of £27.3m (H124: £nil), the largest component of which was a £22.0m charge
related to our decision to rationalise our European distribution network as
part of an ongoing review of the Group's production and distribution assets
that recently commenced. Other adjusting items were a £17.8m (H124: £18.8m)
charge for the amortisation of acquired intangibles, and continued
restructuring costs associated with business transformation of £7.4m (H124:
£2.4m).
Adjusted operating profit increased 8% to £146.9m (H124: £135.6m) at an
associated margin of 17.2% (H124: 16.6%). The improved margin benefited from
higher sales volumes, partially offset by adverse impacts from foreign
exchange as Sterling strengthened and adverse price/mix. As anticipated, the
early benefits of cost savings largely offset the impact of inflation and the
incremental costs of recent investments coming on line. In conjunction with
the five-point plan outlined in February 2025 to improve earnings and returns,
we are implementing additional actions that will enhance our efficiency and
support margin recovery, enabling us to increase our cost savings target by an
additional £60m to £100m of annualised benefits by the end of 2027. Adjusted
profit before tax was £138.0m (H124: £127.3m) or £142.5m at constant
currency, with currency translation reducing reported PBT by £4.5m. Adjusted
basic EPS improved to 72.2p (H124: 68.8p).
Free cash flow was £34.2m (H124: £122.7m). There was a working capital
outflow of £60.7m (H124: £43.5m inflow), with net working capital days
declining in the period and the prior period having benefited from the payment
of a CV19 lipid receivable from 2023. We are implementing improvements to
working capital management, targeting reductions in receivables and inventory
days. Net capital expenditure was £59.5m (H124: £69.7m). Our balance sheet
remains strong, with a debt leverage ratio of 1.5x (30 Jun 2024: 1.4x), within
our target range of one to two times. The Board is proposing a one pence per
share increase to the interim dividend to 48p (H124: 47p).
Business summary
Sales H125 Price/mix Volume Constant currency change Currency H124
£m £m Change
Consumer Care 491.8 (1.8)% 9.2% 7.4% (2.4)% 468.4 5.0%
Life Sciences 261.0 (7.5)% 16.1% 8.6% (2.6)% 246.2 6.0%
Industrial Specialties 103.0 (5.9)% 10.1% 4.2% (2.6)% 101.3 1.6%
Group 855.8 (3.7)% 11.0% 7.3% (2.4)% 815.9 4.9%
H125 Underlying growth Constant currency change Currency impact H124
£m £m £m £m Change
Adjusted profit
Consumer Care 85.7 5.5 6.7% (2.3) 82.5 3.8%
Life Sciences 56.1 13.3 29.7% (2.2) 45.0 24.7%
Industrial Specialties 5.1 (2.7) (33.3)% (0.3) 8.1 (37.0)%
Group 146.9 16.1 11.9% (4.8) 135.6 8.3%
Consumer Care
· Sales increased to £491.8m (H124: £468.4m), up 5% on a reported
basis or 7% at constant currency
o This comprised a 9% increase in sales volumes, with price/mix 2%
lower, and a 2% headwind from foreign currency translation
o By business unit (in constant currency), sales were up 1% in Beauty
Actives, 3% in Beauty Care, 17% in F&F and 7% in Home Care
· Adjusted operating profit was up 4% to 85.7m (H124: £82.5m),
increasing 7% at constant currency. The adjusted operating margin was 17.4%
(H124: 17.6%) benefitting from positive operating leverage but adversely
impacted by unfavourable price/mix given the outperformance of F&F and
Home Care, both relatively lower margin business units
Life Sciences
· Sales increased to £261.0m (H124: £246.2m), up 6% on a reported
basis, or 9% at constant currency
o This comprised a 16% increase in sales volumes, with price/mix 7%
lower, and an adverse impact from foreign currency translation of 3%
o By business unit (in constant currency), sales were up 5% in Pharma,
12% in Crop Protection and 17% in Seed Enhancement
· Adjusted operating profit was up 25% to £56.1m (H124: £45.0m).
The adjusted operating margin improved to 21.5% (H124: 18.3%) principally due
to higher sales volumes
Industrial Specialties
· Sales were £103.0m (H124: £101.3m), up 2% on a reported basis
and by 4% at constant currency
o This comprised a 10% increase in sales volumes, with price/mix 6%
lower, and a 2% headwind from foreign currency translation
o Direct sales grew by 12% whereas sales via the supply agreement fell
by 16% both in constant currency
· Adjusted operating profit was £5.1m (H124: £8.1m). Adjusted
operating profit margin was 5.0% (H124: 8.0%), the prior period having
benefited from positive product mix
Regional summary
% change in sales Constant currency change Change
EMEA 12% 10%
Asia 6% 2%
North America 3% 0%
Latin America 5% 2%
Group 7% 5%
· By business (at constant currency):
o Consumer Care sales were strongest in EMEA, benefiting from a strong
F&F performance and volume-led sales growth in Beauty Care particularly
during the first quarter. Sales grew well in Asia and Latin America, and were
flat in North America where consumer confidence was weaker
o Life Sciences sales were strongest in EMEA, where they increased
double-digit percentage, principally driven by our Agriculture businesses, and
were robust in all other regions, growing mid single-digit percentage
· Our direct exposure to trade tariffs is mitigated by our
well-balanced local and procurement model but increased geopolitical tensions
and the threat of a trade war have made the global economic outlook more
uncertain. We have applied a tariff surcharge since June 2025 to cover any
associated incremental costs, helping to mitigate adverse direct impacts of
tariffs
Quarterly sales performance
Sales £m Constant currency change year-on-year
Quarterly sales Q125 Q225 H125 Q125 Q225 H125
Consumer Care 255.1 236.7 491.8 8% 7% 7%
Life Sciences 134.5 126.5 261.0 11% 6% 9%
Industrial Specialties 52.7 50.3 103.0 7% 2% 4%
Group 442.3 413.5 855.8 9% 6% 7%
· Q2 sales were sequentially lower than Q1 following the strong
start to the year and with strengthening Sterling impacting currency
translation, increased macro-economic uncertainty particularly in the USA, and
the usual seasonality in Crop Protection. Q2 sales remained 6% ahead of the
prior year at constant currency
o In Consumer Care, Q2 sales were sequentially lower than Q1 in Beauty
Actives and Beauty Care
o In Life Sciences, Q2 sales were also sequentially lower, following a very
strong first quarter in Crop Protection
Delivering on our plan to grow earnings and improve returns
Earlier this year, we announced our plan to increase earnings and improve
returns. This multi-year growth and efficiency transformation programme has
five priorities:
To drive sales growth we are:
1. Maximising returns from our portfolio following a period of peak
investment
2. Leveraging our proximity to local & regional (L&R) customers
3. Stepping up innovation to meet demand from customers of all sizes
To enhance operational efficiency and improve profit margins we are:
4. Realigning our cost base through a multi-year operational efficiency
programme
5. Optimising production capacity
By delivering the actions to increase earnings, and prudently managing
capital, we will improve returns.
Accelerating delivery of our five-point plan
To accelerate delivery of the benefits of this plan, we are building momentum
through:
· Prioritising projects that will create the most value and
stopping those with limited impact, with individual workstreams reviewed and
approved by the Executive Committee and the Board
· Detailed action plans for all workstreams, with clear
accountabilities and milestones that we will track regularly
· An appropriately resourced project management team, led by an
experienced Transformation Director
· Leadership changes, including the appointment of Stephen Oxley as
Chief Financial Officer (CFO) and Thomas Riermeier as President of Life
Sciences, both joining in April, and the promotion of Thiru Selvan to
President Supply Chain Operations from a similar role in Asia, with effect
from June
· "Onboarding" leaders and employees, with engagement measured by a
new tool which is showing an overall engagement score of 75% compared with a
target of 80%
Driving sales growth
To drive sales growth, we are 1.) maximising returns of our portfolio
following a period of peak investment:
· In Consumer Care, we are:
o Driving value from our capability in ceramides, acquired in 2023,
through new actives, product launches, and supporting data packs, with sales
increasing ~50% at constant currency albeit from a low base
o Capturing opportunities for continued strong growth in India, where
Consumer Care sales grew ~30% at constant currency, by expanding our capacity
for surfactants with a new plant coming on-stream in the second half of the
year
o Supporting the above-market growth of our F&F business through
targeted investment in sales, R&D and production capacity. Investments
have included new R&D centres in Dubai and in Grasse, France and a new
production facility in Guangzhou, China due to open in 2026
· In Life Sciences, while Crop Protection will benefit from the new
Indian surfactants facility, Pharma has been the principal beneficiary of
recent investment. We will maximise returns from these investments by
leveraging:
o A new super-refining process at our site in Leek, UK, which enhances
our capability in speciality excipients and facilitates the launch of new
ingredients
o Our portfolio of lipids for drug research, which has grown
double-digit percentage CAGR since acquisition in 2020, including leveraging
the Avanti brand to access research customers
o Full-scale lipids production part-funded by government grants at two
multi-purpose cGMP sites which provide the long-term capacity needed to
support future commercial opportunities across a range of therapeutic classes,
as well as critical national infrastructure to support vaccine production in
the event of future pandemics
o Investment in Asia, in recognition of increasing importance of the
region for pharmaceutical R&D
To support sales growth, we are 2.) continuing to leverage our proximity to
L&R customers:
· Euromonitor data suggests that L&Rs now represent more than
30% of global beauty and personal care markets by value, up from 27% in 2019.
There has also been a significant increase in their share of beauty product
launches
· L&R customers now represent 81% (H124: 79%) of our Consumer
Care sales compared with 72% in 2019. In Crop Protection, they represent 56%
of sales (H124: 56%), compared to 44% in 2019
· We have optimised our business model and made selective
investments in recent years to be closer to customers, expanding local sales
and R&D capabilities, regional production, and providing claims data and
formulation support that help accelerate customer time to market
To support growth, we are also 3.) stepping up innovation to meet renewed
demand from customers of all sizes:
· Research intensity in both Consumer Care and Life Sciences has
been sustained at well above 4% of sales
· We established 5 new programmes with 11 new partners through our
external innovation programme, bringing the total number of partners to over
600, enabling us to access specialist expertise in capabilities such as
biotech
· We filed 65 new patents in the period, bringing our total patents
to more than 1,700 across 289 patent families
· New product launches included a biotech-derived keratin for the
professional hair salon market, and a neuro-cosmetic active that enhances
skin's resistance to physical and emotional stress, with a new process also
commissioned to enhance our capability in speciality excipients for drug
delivery
· Renewed customer demand and increasing innovation are reflected
in increased sampling activity, with customer requests for samples of our
innovative Beauty ingredients up 10% CAGR over the last two years
Increasing efficiency
To enhance efficiency, profit margins and customer experience, we are
realigning costs and simplifying and modernising Croda through a 4.)
multi-year operational efficiency programme:
· For 2025, versus a 2024 baseline, we have previously announced
that we are targeting £25m of savings, derived from payroll costs and other
opex, to largely offset inflation and the incremental costs of new investments
coming on-stream. These savings are on track and benefited first half year
operating profit by ~£10m
· The initial programme was scoped to deliver a further £15m of
incremental savings in 2026, or £40m in annualised pre-tax benefits after two
years, at an estimated total cash cost of £20m taken as exceptional
restructuring charges in 2025 and 2026
· Having identified opportunities for further significant
operational efficiencies, we are now extending the programme by an additional
£60m to deliver total annualised pre-tax benefits of ~£100m by the end of
2027, versus the 2024 baseline and including benefits previously communicated.
We expect the cash cost to be ~£80m, which we will take as exceptional
charges in future years, and that there will also be non-cash charges. This
operational efficiency programme will support operating margin recovery and
profitability, offset inflation and mitigate risks to sales growth from
continued macro-economic uncertainty. The principal workstreams are:
o Commercial excellence, including improved account management, pricing
actions, and the rationalisation of our product portfolio and customer base,
the benefits of which have not yet been fully assessed and so are not included
in the total above
o Operations and supply chain excellence including capacity optimisation
across manufacturing, warehousing and logistics which is targeting ~£35m of
the total annualised pre-tax benefits
o Direct procurement of raw materials and indirect procurement of
services, together targeting ~£30m benefits
o Employee costs including reductions in management layers and
headcount, targeting ~£25m benefits
o Enabling functions, including IT, targeting ~£10m benefits
· The expected phasing of in-period benefits and associated cash
costs is:
o 2025: ~£25m cost savings with associated cash costs of ~£15m
o 2026: ~£35m cost savings with associated cash costs of ~£35m
o 2027: ~£25m cost savings with associated cash costs of ~£30m
o By the end of 2027: an additional ~£15m of cost savings bringing the
total run-rate of annualised benefits to ~£100m
We are accelerating improvements in profitability by 5.) optimising capacity
across our production and distribution networks:
· Sales volumes have continued to improve at our 11 shared
manufacturing sites, improving capacity utilisation. These sites manufacture
ingredients principally for Beauty Care, Crop Protection and Industrial
Specialties, which delivered increases to sales volumes of 8%, 18% and 10%
respectively. As a result, the rolling average of absolute sales volumes at
these sites improved to 92% of sales volumes in 2019 (used as the baseline as
it pre-dates the CV19 pandemic and subsequent volatility in demand)
· We are reviewing our global manufacturing footprint to optimise
production capacity, processes and distribution, ensuring we maximise
profitability whilst retaining capacity for growth. This will include a review
of the Group's production and distribution assets, an early outcome of which
was the decision to rationalise our European distribution network which
resulted in impairment charges totalling £22.0m. In parallel, we are
improving our Sales and Operational Planning (SO&P) processes to create an
integrated supply chain across our principal manufacturing sites, driving
efficiencies and improving working capital, whilst also delivering an improved
service to our customers
Improving returns
To improve returns, we are delivering these actions to increase earnings and
improving capital management:
· We are targeting improved management of working capital, reducing
receivables and inventory days which, together with lower capex, provides the
opportunity to enhance cash conversion
· The recent period of intensive investment is coming to an end
providing the portfolio for earnings growth. We expect any acquisitions in the
near term to be limited to small-scale next-generation technologies, and capex
to continue to trend downwards as a percentage of sales
Outlook
Whilst we are mindful that the unpredictable political and economic
environment continues to create uncertainty across our markets, the Group's
performance was in line with expectations in the first half of the year, and
we continue to expect to deliver Group adjusted profit before tax between
£265m and £295m in full year 2025 at constant currency.
Croda will provide an update on third quarter sales performance on Thursday 16
October 2025.
Technical foreign exchange guidance
Impact from currency translation
Constant currency expectations are based on the Group's average exchange rates
through 2024 which were US$1.28 and €1.18. The US Dollar and the Euro
represent approximately 65% of the Group's currency translation exposure. We
estimate that the average annual currency translation impact on adjusted
operating profit is £1m per Dollar cent movement per annum and £1m per Euro
cent movement per annum. H125 adjusted profit before tax was adversely
impacted by £4.5m due to strengthening Sterling. Assuming 1 July 2025
exchange rates for the remainder of the year, we estimate currency translation
would have a further £5m adverse impact on Group adjusted profit before tax
in the second half of the year.
Additional transactional exposures
In addition, the Group is exposed to transactional currency exposures which we
seek to mitigate through currency hedging, pricing and optimising our supply
chains. With the strength of Sterling, H125 adjusted operating profit was
adversely impacted by £6.7m (H124: £1.2m) from transactional exposures.
Business review - Consumer Care
Consumer Care comprises four business units (% of total sales rounded to the
nearest 5%):
· Beauty Actives (~20%) provides peptides for preventing skin
ageing, biotech-derived ingredients (including plant cell culture), and
ceramides for rapid skin moisturisation
· Beauty Care (~45%) comprises 'effect' ingredients - such as hair
care proteins and mineral sunscreens, and 'formulation' ingredients which make
up the structural chassis of customer formulations - such as speciality and
sustainable surfactants
· Fragrances and Flavours (F&F) (~30%) goes to market as
Iberchem with its wide range of fragrances and niche positioning with L&R
customers, Parfex for fine, premium skin care and natural fragrances, and
Scentium for Flavours
· Home Care (~5%) is focused on two technology platforms - fabric
care, with proteins that increase the lifetime of clothes; and household care,
with speciality surfactants
Performance in H125
Consumer Care H125 H124 Change Constant currency change
£m £m
Beauty Actives sales (1)% 1%
Beauty Care sales 1% 3%
F&F sales 15% 17%
Home Care sales 5% 7%
Total Consumer Care sales 491.8 468.4 5% 7%
Adjusted operating profit 85.7 82.5 4% 7%
Adjusted operating margin 17.4% 17.6% (0.2)ppts
IFRS operating profit 55.4 68.9 (20)%
Consumer Care grew sales by 5% on a reported basis or 7% at constant currency.
Sales growth was driven by a 9% increase in sales volumes. Price/mix was 2%
lower, whilst foreign currency translation was a 2% headwind. Sales of New and
Protected Products (NPP) grew 4% at constant currency and were 41% of total
sales (H124: 42%).
Adjusted operating profit increased 7% at constant currency but the adjusted
operating margin was lower. Whilst the operating margin benefited from higher
sales volumes, price/mix was unfavourable due to the outperformance of F&F
and Home Care, both relatively lower margin business units.
With a direct sales force and innovation centres close to customers in key
countries globally, our business model is optimised to support customers of
all sizes. We are further localising delivery to meet the specific
requirements of consumers in each region, and to enhance our intimacy with
local and regional (L&R) customers who are continuing to grow strongly.
Sales to L&R customers increased 11% in constant currency and they now
represent 81% of Consumer Care sales (H124: 79%).
Local investment has focused on fast-growth countries. We continued to see
good growth in Asia, where constant currency sales increased 8%. This
leverages our investment in R&D and sales in recent years, and excellent
relationships with L&R customers including "regional giants" in key Asian
markets such as China, Japan, South Korea, Indonesia and India. In the second
half of the year, we will commission a new surfactants plant in India where
sales grew ~30% at constant currency.
We seek to leverage sustainability to drive commercial value through the
creation of new sustainable ingredients and verification data to prove our
claims. We now provide carbon footprint data for over 1,500 product codes in
Beauty Care and over 750 in Home Care, enabling customer decision making.
Business unit commentary
Beauty Actives
Beauty Actives sales grew 1% in constant currency. Growth was driven by
continued strong demand in Asia whilst North America was impacted by lower
sales for customers' premium products as consumers traded down. We are
stepping up innovation, developing and launching new products including
Zenakine, an active aligned with the neuro beauty trend, which enhances skin's
resistance to physical and emotional stress, thereby reducing skin fatigue and
premature ageing. Our capability in ceramides was acquired in 2023 and
commercialisation to date has taken longer than initially anticipated. With
distributor agreements now exited and ceramides being sold across our global
sales network, we are taking action to drive returns from this investment by:
· Upgrading the technical data packages for existing ceramides,
essential for winning business with new customers
· Leveraging the R&D and formulation expertise across Croda to
develop new actives, production methods and mechanisms to deliver ceramides to
the skin
· Expanding the pipeline of new launches across skin, hair and
dermatological applications. A recent example is Sphingo'HAIR Drypure, a
biotech-derived ceramide developed in South Korea that enhances scalp health
for stronger hair. This is the first application of a ceramide beyond skin
care
These actions are delivering encouraging early results with ceramide sales up
~50% at constant currency, albeit from a low base.
Beauty Care
Beauty Care sales were up 3%, driven by higher sales volumes. Performance
benefited from our focus on contract manufacturers as an additional route to
independent brands, who we can support through our expertise in trends,
formulation and regulatory support. We are accelerating innovation to enhance
portfolio differentiation, launching Kerabio K31, a novel biomimetic bond
builder for hair strength, derived from biotechnology. This non-animal keratin
is aligned with vegan beauty trends and is targeted at the professional hair
salon market. We also continued to see strong demand for application-focused
innovation, where we work in close collaboration with customers of all sizes
to meet their performance requirements or help them realise a specific
opportunity. PEG-free variants of our existing product range are an example of
bespoke ingredients created in this way. To underpin consistent plant
utilisation, we are also managing sales volumes at the lower end of the Beauty
Care portfolio where there is less differentiation, for example through
greater flexibility in pricing for certain product / customer combinations
which is enabling us to recover share.
Fragrances and Flavours (F&F)
F&F delivered another period of high teens percentage sales growth, up 17%
at constant currency and with Parfex's fine, premium and natural fragrances,
as well as Flavours, particularly strong. Whilst this is above our long-term
expectations for this business of continued double digit percentage sales
growth, its continued outperformance versus peers reflects its high proportion
of sales to higher-growth L&R customers. We are supporting the continued
growth of the business by targeted investment in sales, R&D and
production, including at Parfex, in Grasse, France where a new innovation
centre was opened in the period as well as in high-growth markets in the
Middle East and Asia. This includes an R&D centre in Dubai that is now
fully operational and a new production site in Guangzhou, China due to be
commissioned in 2026.
Home Care
Home Care grew 7% at constant currency demonstrating the benefits of its focus
on innovative ingredients differentiated by sustainability and strong
performance claims.
Business review - Life Sciences
Life Sciences comprises three business units (% of total sales rounded to the
nearest 5%):
· Pharma (~55%) provides ingredients and solutions for the delivery
of Active Pharmaceutical Ingredients (APIs) leveraging our expertise in
synthesis, purification, formulation and application technology know-how.
These include speciality excipients, vaccine adjuvants and lipids for drug
delivery, as well as more established ingredients used in health care
· Crop Protection (~30%) offers adjuvants and formulation aids that
improve performance and delivery of crop protection products
· Seed Enhancement (~15%) provides seed coating systems and
enhancement technologies to improve germination, stimulate development of
seeds and increase crop yields
Thomas Riermeier joined Croda as President of Life Sciences on 1 April 2025,
having previously led the Health Care business at Evonik Industries AG.
Performance in H125
Life Sciences H125 H124 Change Constant currency change
£m £m
Pharma sales 3% 5%
Crop Protection sales 9% 12%
Seed Enhancement sales 14% 17%
Total Life Sciences sales 261.0 246.2 6% 9%
Adjusted operating profit 56.1 45.0 25% 30%
Adjusted operating margin 21.5% 18.3% 3.2ppts
IFRS operating profit 38.1 37.6 1%
Life Sciences sales increased to £261.0m (H124: £246.2m), up 6% on a
reported basis, or 9% at constant currency. This comprised a 16% increase in
sales volumes, with price/mix 7% lower, and an adverse impact from foreign
currency translation of 3%. Growth was driven by our Agriculture businesses,
with Seed Enhancement benefitting from strong vegetable treatment demand, and
Crop Protection also seeing good demand particularly in Europe. NPP fell 1% at
constant currency and now represents 28% of total sales (H124: 31%) reflecting
the volume recovery of certain non-NPP Crop Protection ingredients.
IFRS operating profit was £38.1m (H124: £37.6m). Adjusted operating profit
increased 25% to £56.1m (H124: £45.0m). The adjusted operating margin
improved by 3.2 percentage points to 21.5% (H124: 18.3%) principally due to
higher sales volumes and a strong performance in Seed Enhancement.
Business unit commentary
Pharma
Pharma sales increased 5% at constant currency. In consumer health and
veterinary markets, we are implementing actions to recover market share, which
contributed to the continued slow recovery in sales of our more longstanding
ingredients particularly for topical and oral delivery applications. In
biopharma markets, sales of lipids for drug research and delivery systems for
protein-based drugs both continued to grow.
Whilst the regulatory environment in the USA is creating uncertainty for our
customers and drug development timescales have returned to pre-pandemic norms,
Pharma delivered constant currency growth in all regions. Sales growth was
highest in Latin America which benefitted from the continued recovery in
consumer health and veterinary markets, which represent a higher proportion of
its sales than in other regions. Asia is also increasingly important to the
future growth of our Pharma business with China alone now accounting for 30%
of drugs in development globally, and Korea and Japan also in the top ten.
Following an effort spanning many years to register our broad portfolio of
pharma ingredients with the Chinese Pharmacopoeia, Pharma sales in China have
grown double-digit percentage CAGR since 2020, ex CV19.
We are enhancing our capabilities in ingredients and solutions for Pharma
customers by:
· Producing speciality excipients using a new super refining
process at our site in Leek, UK, supporting the launches of:
o Super Refined Poloxamer 188, which can be used as both a formulation
aid in the delivery of APIs and an aid to cell growth during upstream
bioprocessing, with over 100 customers sampled to date
o Super Refined Benzyl Alcohol, an excipient used in hundreds of
approved formulations, with our ingredient demonstrating superior oxidative
stability compared with a competitor product
· Expanding our range of adjuvants and adjuvant systems,
semi-active substances critical to the efficacy of new vaccines, with our
recently launched sustainable squalene adjuvant demonstrating extended
stability compared with competitors' shark-based alternatives
· Expanding our range of more than 2,000 lipids for drug delivery
via a new partnership with Certest, providing customers with access to
Certest's proprietary ionisable lipids
We have been investing in full-scale lipids production at multi-purpose cGMP
sites in Lamar, Pennsylvania, and Leek, UK, as well on a smaller scale at the
acquired site in Alabama. This £175m investment programme has been further
supported by grants from the US and UK Governments. We expect the Lamar asset
to be commissioned in the second half of the year, providing the long-term
capacity needed to support future commercial opportunities across a range of
therapeutic classes, as well as critical national infrastructure to support
vaccine production in the event of future pandemics.
Crop Protection
Crop Protection sales increased 12% at constant currency as we saw a return to
more normal order patterns following an extended period of volatility which
particularly impacted our major crop science customers. By region, demand was
particularly strong in Europe during the first quarter planting season and
demand in the Americas was robust.
Our focus on developing business with fast-growing local and regional
customers is continuing to deliver positive sales and volume impact. Smaller
customers now represent 56% (H124: 56%) of sales globally, compared to 44% in
2019. L&R customers are particularly important in Asia, where markets are
more fragmented. Supporting continued growth in Asia, our Crop Protection
business will benefit from the commissioning of our new surfactants plant in
India in 2025.
Seed Enhancement
Seed Enhancement sales grew 17% at constant currency reflecting a recovery
from challenging markets in 2023 and 2024, and its strong position in a market
which benefits from significant structural drivers of growth, many of which
are regulation driven. The business is exposed to both vegetable seeds and
field crops, principally providing enhancement services for high-value
vegetable seeds where demand was strong.
We are adding to our range of seed coatings that are free from micro-plastics,
strengthening our position ahead of the European ban on microplastics in seeds
in 2028. We are also applying AI modelling techniques to accelerate the
development of new priming, pelleting and x-ray processes, meaning we can
derive commercial benefits from innovation during the same planting season.
Business review - Industrial Specialties
Industrial Specialties plays an important role in our integrated Group
manufacturing model. The business contributes to the efficiency of our shared
manufacturing site model by helping to optimise utilisation rates, maximising
sales into value-added industrial applications using Croda's core chemistries,
and operating a supply contract established as part of the divestment of the
industrial businesses in June 2022.
Performance in H125
Industrial Specialities H125 H124 Change Constant currency change
£m £m
Direct sales 9% 12%
Sales via supply agreement (18)% (16)%
Total Industrial Specialities sales 103.0 101.3 2% 4%
Adjusted operating profit 5.1 8.1 (37)% (33)%
Adjusted operating margin 5.0% 8.0% (3.0)ppts
IFRS operating profit 0.9 7.9 (89)%
Industrial Specialties sales were £103.0m (H124: £101.3m), up 2% on a
reported basis and by 4% at constant currency. Sales comprised a 10% increase
in volumes, with price/mix 6% lower, and an 2% headwind from foreign currency
translation. At constant currency, direct sales by Croda to industrial
customers grew by 12% and sales fell 16% via the supply agreement where we do
not directly control demand.
Adjusted operating profit was £5.1m (H124: £8.1m). The resulting adjusted
operating profit margin was 5.0% (H124: 8.0%), the prior period having
benefited from particularly positive product mix.
Financial performance
Currency translation
Sterling strengthened against both the US Dollar, at US$1.298 (H124: US$1.266)
and against the Euro, at €1.187 (H124: €1.170). Currency translation
reduced sales by £20.1m, adjusted operating profit by £4.8m and adjusted
profit before tax by £4.5m. This was driven by both the strength of Sterling
against the US Dollar and the Euro (which together represent approximately 65%
of the Group's currency translation exposure) and by the impact of changes in
exchange rates for other smaller currencies including the effect of the
application of IAS 29 ('Financial Reporting in Hyperinflationary Economies')
to reporting in Argentina and Turkey. We estimate that the average annual
currency translation impact on adjusted operating profit is £1m per Dollar
cent movement per annum and £1m per Euro cent movement per annum. The impact
from movements in smaller currencies is broadly aligned with the impact from
movements in the US Dollar.
Additional transactional exposure
In addition, the Group is exposed to transactional currency exposures which we
seek to mitigate through currency hedging, pricing and optimising our supply
chains. With the strength of Sterling, H125 adjusted operating profit was
adversely impacted by £6.7m (H124: £1.2m) from transactional exposures.
Sales
Sales H125 Price/mix Volume Constant currency change Currency H124
£m £m Change
Consumer Care 491.8 (1.8)% 9.2% 7.4% (2.4)% 468.4 5.0%
Life Sciences 261.0 (7.5)% 16.1% 8.6% (2.6)% 246.2 6.0%
Industrial Specialties 103.0 (5.9)% 10.1% 4.2% (2.6)% 101.3 1.6%
Group 855.8 (3.7)% 11.0% 7.3% (2.4)% 815.9 4.9%
Group sales were up 5% to £855.8m (H124: £815.9m), with volume up 11%, but
price/mix down 4%, and a 2% headwind from foreign exchange. The 7% increase in
sales at constant currency comprised a 7% increase in Consumer Care with Life
Sciences and Industrial Specialties up by 9% and 4% respectively.
Quarterly sales performance
Overall, sales grew by 6% at constant currency in the second quarter compared
with the prior year or by 2% on a reported basis. Reported sales were down 6%
in the second quarter on a sequential basis, reflecting a particularly strong
Q1 and adversely impacted by increased macro-economic uncertainty,
particularly in North America, usual seasonality in Crop Protection and
strengthening Sterling.
Quarterly sales £m Consumer Life Industrial Group
Care Sciences Specialties
Q1 2023 236.8 170.8 69.1 476.7
Q2 2023 218.8 132.4 53.0 404.2
Q3 2023 218.2 125.0 43.7 386.9
Q4 2023 212.3 126.1(*) 40.3 378.7(*)
Q1 2024 236.8 121.8 49.9 408.5
Q2 2024 231.6 124.4 51.4 407.4
Q3 2024 228.1 128.8 49.7 406.6
Q4 2024 223.5 129.3 52.8 405.6
Q1 2025 255.1 134.5 52.7 442.3
Q2 2025 236.7 126.5 50.3 413.5
Half yearly sales £m Consumer Life Industrial Group
Care Sciences Specialties
H1 2023 455.6 303.2 122.1 880.9
H2 2023 430.5 251.1(*) 84.0 765.6(*)
H1 2024 468.4 246.2 101.3 815.9
H2 2024 451.6 258.1 102.5 812.2
H1 2025 491.8 261.0 103.0 855.8
(*)Where indicated, Life Sciences and Group sales exclude £48m of lipid sales
for CV19 applications in Q4 2023, to provide a more informative comparator as
there were no CV19 lipid sales in the other quarters.
Profit and margin
H125 H124
IFRS Adjustments Adjusted IFRS Adjustments Adjusted
£m £m £m £m £m £m
Sales 855.8 - 855.8 815.9 - 815.9
Cost of sales (470.2) - (470.2) (448.7) - (448.7)
Gross profit 385.6 - 385.6 367.2 - 367.2
Operating costs (291.2) (52.5) (238.7) (252.8) (21.2) (231.6)
Operating profit 94.4 (52.5) 146.9 114.4 (21.2) 135.6
Net interest charge (8.9) - (8.9) (8.3) - (8.3)
Profit before tax 85.5 (52.5) 138.0 106.1 (21.2) 127.3
Tax (22.6) 12.9 (35.5) (26.0) 4.9 (30.9)
Profit after tax 62.9 (39.6) 102.5 80.1 (16.3) 96.4
H125 H124
Operating profit/(loss) IFRS Adjustments Adjusted IFRS Adjustments Adjusted
£m £m £m £m £m £m
Consumer Care 55.4 (30.3) 85.7 68.9 (13.6) 82.5
Life Sciences 38.1 (18.0) 56.1 37.6 (7.4) 45.0
Industrial Specialties 0.9 -(4.2) 5.1 7.9 -(0.2) 8.1
Group 94.4 (52.5) 146.9 114.4 (21.2) 135.6
Adjustments H125 H124
£m
£m
Restructuring and transformation costs (7.4) (2.4)
Amortisation of intangible assets arising on acquisition (17.8) (18.8)
Impairment charges (27.3) -
Total adjustments (52.5) (21.2)
H125 Underlying growth Constant currency change Currency H124
£m £m impact £m Change
Adjusted profit £m
Consumer Care 85.7 5.5 6.7% (2.3) 82.5 3.8%
Life Sciences 56.1 13.3 29.7% (2.2) 45.0 24.7%
Industrial Specialties 5.1 (2.7) (33.3)% (0.3) 8.1 (37.0)%
Operating profit 146.9 16.1 11.9% (4.8) 135.6 8.3%
Net interest (8.9) (8.3)
Profit before tax 138.0 127.3
Following two years of raw material cost deflation in 2023 and 2024, average
raw materials costs were stable in period with limited changes between 1
January and 30 June 2025. People costs were up by around 2.5% against the
prior year, predominantly reflecting inflationary salary rises. Both energy
and freight, which represent around 2.5% of sales respectively, increased in
the period, the former due to market movements and the latter predominantly
due to higher sales.
Our operational efficiency programme contributed benefits of ~£10m to first
half year operating profit. In the context of a less predictable political and
economic environment, we have commenced a review of the Group's production and
distribution assets which will support our priorities to realign the cost base
and optimise capacity. An early outcome of this review was the decision to
rationalise our European distribution network.
IFRS operating profit was £94.4m (H124: £114.4m). IFRS operating profit
included a charge for adjusting items of £52.5m (H124: £21.2m) including
impairment charges of £27.3m (H124: £nil), of which £22.0m related the
rationalisation of our European distribution network. Other adjusting items
were a £17.8m (H124: £18.8m) charge for amortisation of acquired
intangibles, and continuing restructuring costs associated with business
transformation of £7.4m (H124: £2.4m).
Group adjusted EBITDA increased 8% to £198.5m (H124: £184.5m) at an adjusted
EBITDA margin of 23.2% (H124: 22.6%). Group adjusted operating profit was also
up 8% to £146.9m (H124: £135.6m) or by 12% at constant currency. The
operating profit margin improved to 17.2% (H124: 16.6%) benefitting from
improved asset utilisation at our 11 shared manufacturing sites, partly offset
by foreign exchange and adverse price/mix.
Net finance costs were £8.9m (H124: £8.3m) and we continue to expect net
finance costs to be approximately £25m for 2025. Profit before tax (on an
IFRS basis) was £85.5m (H124: £106.1m) and adjusted profit before tax
increased 8% to £138.0m (H124: £127.3m) or by 12% at constant currency to
£142.5m. The effective tax rate on adjusted profit was 25.7% (H124: 24.3%)
and the effective tax rate on IFRS profit was 26.4% (H124: 24.5%). We continue
to expect an effective tax rate on adjusted profit of 26% in future years.
IFRS basic earnings per share (EPS) were 43.8p (H124: 57.2p) and adjusted
basic EPS were 72.2p (H124: 68.8p).
Cash flow and balance sheet
Six months ended 30 June
Cash flow H124
£m
H125
£m
Adjusted operating profit 146.9 135.6
Depreciation and amortisation 51.6 48.9
Adjusted EBITDA 198.5 184.5
Working capital (60.7) 43.5
Interest & tax paid (39.1) (33.4)
Non-cash pension expense 2.2 0.9
Share-based payments 3.0 1.5
Other cash movements (7.4) (2.5)
Net cash generated from operating activities 96.5 194.5
Net capital expenditure (59.5) (69.7)
Interest received 0.6 2.3
Payment of lease liabilities (9.0) (8.8)
Exceptional items cash outflow add back 5.6 4.4
Free cash flow 34.2 122.7
Dividends (87.9) (86.6)
Acquisitions - -
Business disposal - -
Exceptional items cash outflow (6.0) (4.4)
Other cash movements (1.4) (3.5)
Net cash flow (61.1) 28.2
Net movement in borrowings 68.7 14.5
Net movement in cash and cash equivalents 7.6 42.7
Free cash flow was £34.2m (H124: £122.7m) including a working capital
outflow of £60.7m (H124: £43.5m inflow driven by the payment of a CV-19
receivable from 2023) with adverse movements of stock and debtor days in the
period. This was partially offset by lower net capital expenditure of £59.5m
(H124: £69.7m). We are targeting improvements in working capital, reducing
receivables and inventory days, which together with capital expenditure
continuing to trend downwards as a percentage of sales, provides the
opportunity to enhance cash conversion. Building on our record of consistent
distribution to shareholders, the Board is proposing a one pence increase to
the interim dividend to 48.0p (H124: 47.0p).
Closing net debt was £580.1m (30 June 2024: £507.9m), with a leverage ratio
of 1.5x EBITDA (30 June 2024: 1.4x), within our 1-2x target range. As at 30
June 2025, the Group had committed funding in place of £1,062.4m, with
undrawn long-term committed facilities of £354.1m and £157.8m in cash.
There are no changes to our capital allocation framework but we are applying
it with greater rigour to improve discipline over:
1. Organic investment to support growth
2. Dividends to shareholders representing 40-50% of adjusted earnings
through the cycle
3. Selective margin-accretive M&A from the medium term
4. Maintaining leverage in the 1-2x EBITDA range, returning surplus cash
to shareholders
Following the significant portfolio transition in recent years, our focus is
now on delivering returns from recent investments, and we would expect any
acquisitions in the near term to be focused on small adjacent technologies.
Retirement benefits
The post-tax asset on retirement benefit plans at 30 June 2025, measured on an
accounting valuation basis under IAS19, was £75.4m (30 June 2024: £94.1m).
Cash funding of the various plans is driven by the schemes' ongoing actuarial
valuations. The triennial actuarial valuation of the largest pension plan, the
UK Croda Pension Scheme, was performed as at 30 September 2023 and indicated
that funding position of the scheme had significantly improved. The scheme was
120.6% funded on a technical provisions basis. Consequently, the cash cost of
providing benefits has fallen and no deficit recovery plan is required.
Sustainability disclosures
We are committed to being the most sustainable supplier of innovative
ingredients by having positive impacts on climate, nature, and society
globally. At the midpoint of the United Nations' "decade of action" we are
prioritising actions and targets for 2030.
To be Climate Positive, we will reduce operational greenhouse gas emissions by
46.2% between 2018 and 2030, in line with our science-based target (SBT),
making a contribution to limiting global temperature rise to no more than
1.5°C above pre-industrial level:
· Our scope 1 and 2 emissions were 64,284 tCO2e (H124: 56,959 tCO2e
restated), the increase due principally to higher sales volumes
· We have met our 2024 interim target of a greater than 25%
reduction from our 2018 baseline and we plan to continue to take the necessary
actions to deliver on our 2030 Science Based Targets
Our Land Positive objective helps drive our positive impacts on nature:
· We saved a cumulative total of 289,000 hectares of land between
2020 and 2024 through the use of our crop and seed technologies to improve
yields. This benefits nature in alleviating the pressure to convert more land
to agricultural uses
Our People Positive objective covers both our employees and wider society:
· Croda Foundation has supported 54 projects to sustainably improve
22.9m lives globally having committed ~£6m in project funding since it was
founded in 2021
· Our Total Recordable Injury Rate ("TRIR") fell to 0.45 (H124:
0.57) as we continued to set the example of living safety as a value through
our leadership behaviours
Principal risks
Our risk management processes, policies and the principal risks and
uncertainties facing the Group were set out in the Group's Annual Report and
Accounts for the year ended 31 December 2024. Our risk management processes
and policies remain largely consistent, with minor adjustments being made in
conjunction with the deployment of a new integrated risk management system.
The Group's principal risks, as reported in the financial statements for the
year ended 31 December 2024, were revenue generation; product and technology
innovation and protection; digital technology innovation; delivering
sustainable solutions - Climate, Land, and People Positive; management of
business change; our people - culture, wellbeing, talent development and
retention; product quality; loss of a significant manufacturing site; ethics
and compliance; and security of business information and networks.
During our periodic risk reviews, we confirmed that all principal risks
reported remain relevant and no new principal risks were identified. Four
principal risks continue to intensify:
· While our direct exposure to tariffs is limited by our well
balanced local manufacturing and procurement model, increased geopolitical
tensions and the threat of a trade war have made the global economic outlook
more uncertain, increasing our principal risk of revenue generation
· Security of business information and networks risk also
heightened in likelihood because of evolving technologies and increasingly
sophisticated malicious activities worldwide
· As we accelerate our transformation programme, both our
management of business change and people principal risks can increase if not
properly managed
Statement of Directors' Responsibilities
The Directors confirm that this condensed interim financial information has
been prepared in accordance with IAS 34 as adopted for use in the UK and that
the interim management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
· an indication of important events that have occurred during the
first six months and their impact on the condensed set of financial
statements, and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
· material related party transactions in the first six months and
any material changes in the related party transactions described in the last
Annual Report.
The Directors of Croda International Plc at 30 June 2025 were as follows (a
list of current Directors is maintained on the Croda website: www.croda.com
(http://www.croda.com) ):
Danuta Gray (Chair)
Steve Foots (Group Chief Executive)
Stephen Oxley (Chief Financial Officer)
Ian Bull
Roberto Cirillo
Jacqui Ferguson
Chris Good
Keith Layden
Nawal Ouzren
By order of the Board
Steve
Foots
Group Chief Executive
Independent Review Report to Croda International Plc
Conclusion
We have been engaged by Croda International PLC ("the Company") to review the
condensed set of financial statements in the half-yearly financial report for
the six months ended 30 June 2025 which comprises the Group Condensed Interim
Income Statement, Group Condensed Interim Statement of Comprehensive Income,
Group Condensed Interim Balance Sheet, Group Condensed Interim Statement of
Changes in Equity, Group Condensed Interim Statement of Cash Flows and the
related explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2025 is not prepared, in all
material respects, in accordance with IAS 34 Interim Financial Reporting as
adopted for use in the UK and the Disclosure Guidance and Transparency Rules
("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity ("ISRE (UK) 2410") issued for use in the
UK. A review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. We read the other
information contained in the half-yearly financial report and consider whether
it contains any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention that causes us to believe that the Directors
have inappropriately adopted the going concern basis of accounting, or that
the Directors have identified material uncertainties relating to going concern
that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However, future events or conditions may cause the Group to
cease to continue as a going concern, and the above conclusions are not a
guarantee that the Group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
The annual financial statements of the Group are prepared in accordance with
UK-adopted international accounting standards.
The Directors are responsible for preparing the condensed set of financial
statements included in the half-yearly financial report in accordance with IAS
34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the Directors are
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. Our conclusion, including our conclusions relating to going concern,
are based on procedures that are less extensive than audit procedures, as
described in the Basis for conclusion section of this report.
The purpose of our review and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the DTR of the
UK FCA. Our review has been undertaken so that we might state to the Company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company for our review work, for this
report, or for the conclusions we have reached.
Ian Griffiths
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London E14 5GL
28 July 2025
Croda International Plc
Interim announcement of trading results for the six months ended 30 June 2025
Group Condensed Interim Income Statement
First half 2025 First half 2024 Full year 2024
Note Adjusted Adjustments Reported Adjusted Adjustments Reported Adjusted Adjustments Reported
£m
£m
Total
£m
£m
Total
£m
£m
Total
£m
£m
£m
Revenue 2 855.8 - 855.8 815.9 - 815.9 1,628.1 - 1,628.1
Cost of sales (470.2) - (470.2) (448.7) - (448.7) (894.2) - (894.2)
Gross profit 385.6 - 385.6 367.2 - 367.2 733.9 - 733.9
Operating costs (238.7) (52.5) (291.2) (231.6) (21.2) (252.8) (454.2) (52.2) (506.4)
Operating profit 2 146.9 (52.5) 94.4 135.6 (21.2) 114.4 279.7 (52.2) 227.5
Financial costs 3 (12.6) - (12.6) (12.8) - (12.8) (31.0) - (31.0)
Financial income 3 3.7 - 3.7 4.5 - 4.5 11.3 - 11.3
Profit before tax 138.0 (52.5) 85.5 127.3 (21.2) 106.1 260.0 (52.2) 207.8
Tax (35.5) 12.9 (22.6) (30.9) 4.9 (26.0) (59.8) 11.6 (48.2)
Profit after tax for the period 102.5 (39.6) 62.9 96.4 (16.3) 80.1 200.2 (40.6) 159.6
Attributable to:
Non-controlling interests 1.7 - 1.7 0.3 - 0.3 1.1 - 1.1
Owners of the parent 100.8 (39.6) 61.2 96.1 (16.3) 79.8 199.1 (40.6) 158.5
102.5 (39.6) 62.9 96.4 (16.3) 80.1 200.2 (40.6) 159.6
Adjustments relate to exceptional items, amortisation of intangible assets
arising on acquisition and the tax thereon. Details are disclosed in note 2.
Pence Pence Pence Pence Pence Pence
Adjusted
Reported
Adjusted
Reported
Adjusted
Reported
Total
Total
Total
Earnings per 10.61p ordinary share
Basic 72.2 43.8 68.8 57.2 142.6 113.5
Diluted 72.2 43.8 68.8 57.2 142.5 113.5
Ordinary dividends paid in the period
Interim 4 - - 47.0
Final 4 63.0 62.0 62.0
Group Condensed Interim Statement of Comprehensive Income
2025 2024 2024
First half
First half
Full year
£m
£m
£m
Profit after tax for the period 62.9 80.1 159.6
Other comprehensive (expense)/income:
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of post-retirement benefit obligations (4.6) 37.5 15.5
Tax on items that will not be reclassified 1.1 (9.3) (3.9)
(3.5) 28.2 11.6
Items that have been or may be reclassified subsequently to profit or loss:
Currency translation (39.2) (52.8) (90.3)
(39.2) (52.8) (90.3)
Other comprehensive expense for the period (42.7) (24.6) (78.7)
Total comprehensive income for the period 20.2 55.5 80.9
Attributable to:
Non-controlling interests 0.6 0.1 0.9
Owners of the parent 19.6 55.4 80.0
20.2 55.5 80.9
Arising from:
Continuing operations 20.2 55.5 80.9
Group Condensed Interim Balance Sheet
Note At At
30 June 31 December
2025 2024
£m
£m
Assets
Non-current assets
Intangible assets 5 1,296.7 1,310.6
Property, plant and equipment 6 1,031.0 1,082.9
Right of use assets 62.7 85.0
Investments 1.9 1.9
Deferred tax assets 23.5 14.7
Retirement benefit assets 8 126.3 130.0
2,542.1 2,625.1
Current assets
Inventories 391.6 367.9
Trade and other receivables 373.1 349.5
Cash and cash equivalents 157.8 166.8
922.5 884.2
Liabilities
Current liabilities
Trade and other payables (260.2) (274.0)
Borrowings and other financial liabilities (150.4) (35.0)
Lease liabilities (13.1) (13.2)
Provisions (5.9) (6.5)
Current tax liabilities (16.2) (7.8)
(445.8) (336.5)
Net current assets 476.7 547.7
Non-current liabilities
Borrowings and other financial liabilities (508.9) (580.2)
Lease liabilities (65.5) (70.7)
Other payables (1.0) (1.1)
Retirement benefit liabilities 8 (25.1) (25.7)
Provisions (15.7) (17.3)
Deferred tax liabilities (171.4) (180.9)
(787.6) (875.9)
Net assets 2,231.2 2,296.9
Equity attributable to owners of the parent 2,216.2 2,282.5
Non-controlling interests in equity 15.0 14.4
Total equity 2,231.2 2,296.9
Group Condensed Interim Statement of Changes in Equity
Note Share Share Other Retained Non- Total
capital
premium
reserves
earnings
controlling
equity
£m
account
£m
£m
interests
£m
£m
£m
At 1 January 2024 15.1 707.7 (10.3) 1,640.0 15.6 2,368.1
Profit after tax for the period - - - 79.8 0.3 80.1
Other comprehensive (expense)/income for the period - - (52.6) 28.2 (0.2) (24.6)
Total comprehensive (expense)/income for the period - - (52.6) 108.0 0.1 55.5
Transactions with owners:
Dividends on equity shares 4 - - - (86.6) - (86.6)
Share-based payments - - - 1.7 - 1.7
Transactions in own shares - - - (1.8) - (1.8)
Total transactions with owners - - - (86.7) - (86.7)
Changes in ownership interests:
Dividends paid to non-controlling interest - - - - (1.1) (1.1)
Total changes in ownership interests - - - - (1.1) (1.1)
Total equity at 30 June 2024 15.1 707.7 (62.9) 1,661.3 14.6 2,335.8
At 1 January 2025 15.1 707.7 (100.4) 1,660.1 14.4 2,296.9
Profit after tax for the period - - - 61.2 1.7 62.9
Other comprehensive expense for the period - - (38.1) (3.5) (1.1) (42.7)
Total comprehensive (expense)/income for the period - - (38.1) 57.7 0.6 20.2
Transactions with owners:
Dividends on equity shares 4 - - - (87.9) - (87.9)
Share-based payments - - - 3.2 - 3.2
Transactions in own shares - - - (1.2) - (1.2)
Total transactions with owners - - - (85.9) - (85.9)
Total equity at 30 June 2025 15.1 707.7 (138.5) 1,631.9 15.0 2,231.2
Other reserves include the Capital Redemption Reserve of £0.9m (30 June 2024:
£0.9m) and the Translation Reserve of £(139.4)m (30 June 2024: £(63.8)m).
Group Condensed Interim Statement of Cash Flows
Note 2025 2024 2024
First half
First half
Full year
£m
£m
£m
Cash generated by operations
Operating profit 94.4 114.4 227.5
Adjustments for:
Depreciation and amortisation 69.4 67.7 135.8
Impairments of intangible assets and property, plant and equipment 27.3 - -
(Profit)/loss on disposal and write-offs of intangible assets and property, (0.1) (0.1) 0.6
plant and equipment
Net provisions charged 2.7 2.0 13.4
Share-based payments 3.0 1.5 5.0
Non-cash pension expense 2.2 0.9 2.9
Net-monetary adjustment 0.5 2.4 5.0
Cash paid against operating provisions (3.1) (4.4) (7.3)
Movement in inventories (35.0) (24.5) (39.3)
Movement in receivables (30.7) 25.0 21.3
Movement in payables 5.0 43.0 38.9
Cash generated by operations 135.6 227.9 403.8
Interest paid (11.3) (11.3) (28.5)
Tax paid (27.8) (22.1) (55.9)
Net cash generated from operating activities 96.5 194.5 319.4
Cash flows from investing activities
Purchase of property, plant and equipment (63.9) (95.5) (178.4)
Receipt of government grant 5.3 26.7 43.0
Purchase of other intangible assets (1.1) (1.7) (3.4)
Proceeds from sale of property, plant and equipment 0.2 0.8 0.9
Tax paid on business disposals -- -- (6.8)
Cash paid against non-operating provisions (0.6) (0.6) (1.3)
Interest received 0.6 2.3 6.9
Net cash used in investing activities (59.5) (68.0) (139.1)
Cash flows from financing activities
New borrowings 103.2 80.7 440.4
Repayment of borrowings (34.5) (66.2) (449.4)
Payment of lease liabilities (9.0) (8.8) (17.5)
Net transactions in own shares (1.2) (1.8) (1.8)
Dividends paid to equity shareholders 4 (87.9) (86.6) (152.2)
Dividends paid to non-controlling interests - (1.1) (2.1)
Net cash used in financing activities (29.4) (83.8) (182.6)
Net movement in cash and cash equivalents 7.6 42.7 (2.3)
Cash and cash equivalents brought forward 141.7 150.2 150.2
Exchange differences (2.0) (3.2) (6.2)
Cash and cash equivalents carried forward 147.3 189.7 141.7
Cash and cash equivalents carried forward comprise:
Cash at bank and in hand 157.8 209.3 166.8
Bank overdrafts (10.5) (19.6) (25.1)
147.3 189.7 141.7
A reconciliation of the cash flows above to the movements in net debt is shown
in note 7.
Notes to the Interim Financial Statements
1. a. General information
The Company is a public limited company (Plc) incorporated and domiciled in
the UK. The address of its registered office is Cowick Hall, Snaith, Goole,
East Yorkshire, DN14 9AA. The Company is listed on the London Stock Exchange.
This consolidated interim report was approved for issue on 28 July 2025. The
financial information included in this interim financial report for the six
months ended 30 June 2025 does not constitute statutory accounts as defined in
section 434 of the Companies Act 2006 and is unaudited. The comparative
information for the six months ended 30 June 2024 is also unaudited. The
comparative figures for the year ended 31 December 2024 have been extracted
from the Group's financial statements, as filed with the Registrar of
Companies, on which the auditors gave an unqualified opinion, did not contain
an emphasis of matter paragraph and did not make a statement under section 498
of the Companies Act 2006. These Group condensed interim financial statements
have been reviewed, not audited.
b. Basis of preparation
This consolidated interim financial report for the six months ended 30 June
2025 has been prepared in accordance with IAS 34 Interim Financial Reporting
as adopted for use in the UK.
Tax charged within the six months ended 30 June 2025 has been calculated by
applying the effective rate of tax which is expected to apply, on a
jurisdiction-by-jurisdiction basis, to the Group for the year ending 31
December 2025 using rates substantively enacted by 30 June 2025 as required by
IAS 34 'Interim Financial Reporting'.
On 4 July 2025, the One Big Beautiful Bill Act was signed into law in the
U.S., which contains a broad range of tax reform provisions affecting
businesses. We are evaluating the full effects of the legislation on our
estimated annual effective tax rate and cash tax position. As the legislation
was signed into law after the close of our second quarter, the impacts are not
included in our operating results for the six months ended 30 June 2025. Had
the legislation been enacted, it would not have impacted our balance sheet
position.
The annual financial statements of the Group for the year ended 31 December
2025 will be prepared in accordance with UK-adopted international accounting
standards. As required by the Disclosure Guidance and Transparency Rules of
the Financial Conduct Authority, the condensed set of financial statements has
been prepared applying the accounting policies and presentation that were
applied in the preparation of the Company's published consolidated financial
statements for the year ended 31 December 2024, which were prepared in
accordance with the requirements of the Companies Act 2006 ("Adopted IFRSs")
and prepared in accordance with international financial reporting standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European
Union.
Going concern basis
The condensed consolidated financial statements have been prepared on a going
concern basis which the Directors believe to be appropriate for the following
reasons:
At 30 June 2025 the Group had £1,062.4m of committed debt facilities
available from its banking group, USPP bondholders and lease providers, with
principal maturities between 2026 and 2030, of which £354.1m (30 June 2024:
£364.8m) was undrawn, together with cash balances of £157.8m (30 June 2024:
£209.3m). The Group's debt facilities have funding covenant requirements,
principally the leverage covenant with a maximum level of 3.5x net debt to
covenant EBITDA, and interest cover. USPP debt of £129.6m is due to mature in
June 2026 which has been assumed to be renewed as part of the Group's going
concern assessment, however sufficient headroom exists within the revolving
credit facility throughout the forecast period were this debt not to be
refinanced.
The Directors have reviewed the liquidity and covenant forecasts for the
Group's going concern assessment period covering at least 12 months from the
date of approval of the condensed consolidated financial statements. Given the
time horizon of these forecasts, the risk of climate change is not expected
to have a material impact on these forecasts. Based on these forecasts, the
Group continues to have significant liquidity headroom and strong financial
covenant headroom under its debt facilities.
A reverse stress testing scenario has been performed which assesses that
adjusted operating profit would need to fall by over 95% to trigger an event
of default prior to 31 December 2026. This scenario includes some mitigating
actions to conserve cash including reducing dividends. Throughout this
scenario, the Group continues to have significant liquidity headroom. The
Directors are therefore satisfied that the Group has sufficient resources to
continue in operation for a period of not less than 12 months from the date of
approval of the condensed consolidated financial statements. Accordingly, the
condensed consolidated financial statements have been prepared on a going
concern basis.
c. Accounting policies
The accounting policies applied in these interim financial statements are the
same as those applied in the Group's financial statements for the year ended
31 December 2024.
One amendment to accounting standards is effective from 1 January 2025 but
does not have a material effect on the Group's financial statements.
2. Segmental information
The Group's sales, marketing and research activities are organised into three
global market sectors, being Consumer Care, Life Sciences and Industrial
Specialties. These are the segments for which summary management information
is presented to the Group's Executive Committee, which is deemed to be the
Group's Chief Operating Decision Maker.
There is no material trade between segments. Segmental results include items
directly attributable to a specific segment as well as those that can be
allocated on a reasonable basis. There are no significant seasonal variations
which impact the split of revenue between the first and second half of the
financial year.
2025 2024 2024
First half
First half
Full year
£m
£m
£m
Income statement
Revenue
Consumer Care 491.8 468.4 920.0
Life Sciences 261.0 246.2 504.3
Industrial Specialties 103.0 101.3 203.8
Total Group revenue 855.8 815.9 1,628.1
Adjusted operating profit
Consumer Care 85.7 82.5 160.2
Life Sciences 56.1 45.0 104.0
Industrial Specialties 5.1 8.1 15.5
Total Group operating profit (before exceptional items and amortisation of 146.9 135.6 279.7
intangible assets arising on acquisition)
Exceptional items and amortisation of intangible assets arising on acquisition (52.5) (21.2) (52.2)
Total Group operating profit 94.4 114.4 227.5
In the following table, revenue has been disaggregated by sector and
destination.
Europe, Middle East & Africa Reported
£m
Total
North America £m Latin America £m Asia
£m
£m
Revenue o
First half 2025
Consumer Care 216.7 97.5 49.8 127.8 491.8
Life Sciences 96.7 82.2 36.2 45.9 261.0
Industrial Specialties 38.9 22.2 3.6 38.3 103.0
Total Group revenue 352.3 201.9 89.6 212.0 855.8
Revenue
First half 2024
Consumer Care 198.0 100.2 48.2 122.0 468.4
Life Sciences 85.7 80.1 35.3 45.1 246.2
Industrial Specialties 36.7 20.7 4.0 39.9 101.3
Total Group revenue 320.4 201.0 87.5 207.0 815.9
Group revenue of £6.2m recognised in 2024 (within the Life Sciences sector)
has been reclassified from EMEA (£3.5m) and Asia (£2.7m) to North America
following a review of the destination of the Group's commercial relationships
for certain customers.
2. Segmental information continued
Adjustments
2025 2024 2024
First half
First half
Full year
£m
£m
£m
Exceptional items - operating profit
Restructuring costs - (2.4) (3.0)
Business transformation costs (7.4) - (3.5)
Environmental provision - - (8.5)
Intangible asset impairment (3.4) - -
Property, plant and equipment impairment (7.3) - -
Right of use asset impairment (16.6) - -
Exceptional items (34.7) (2.4) (15.0)
Amortisation of intangible assets arising on acquisition (17.8) (18.8) (37.2)
Total adjustments (52.5) (21.2) (52.2)
The exceptional items in the current year relate to:
· Business transformation costs reflect the Group-wide business
transformation programme which commenced in the prior year. Several projects
form part of this programme, which in time will include the planned upgrade of
the Group's current Enterprise Resource Planning (ERP) system. Projects in the
current period include restructuring costs associated with right-sizing the
organisation where appropriate alongside certain legal and professional costs
related to critically examining the Group's cost base and identifying
opportunities for efficiencies and cost optimisation. The business
transformation programme is expected to continue for several years.
· Property, plant and equipment (£7.3m), right of use assets
(£16.4m) and intangible asset (£3.4m) impairments. Further detail on these
impairments is included in notes 5, 6 and 8. The right of use asset impairment
primarily relates to the optimisation of the Group's warehousing footprint
detailed in note 6.
The exceptional items in the prior half year related to restructuring costs
arising from the changes in the Group's operating model, announced in December
2023.
The exceptional items in the prior full year included an increase to
environmental provisions in the Americas, in addition to restructuring and
business transformation costs as detailed above.
The adjustments to operating profit relate to our segments as follows:
Consumer Care £30.3m (30 June 2024: £13.6m), Life Sciences £18.0m (30 June
2024: £7.4m) and Industrial Specialties £4.2m (30 June 2024: £0.2m).
3. Net financial costs
2025 2024 2024
First half
First half
Full year
£m
£m
£m
Financial costs
Interest payable on borrowings 10.9 11.0 25.8
Interest on lease liabilities 1.5 1.4 2.8
Other bank loans and overdrafts 0.2 0.4 2.3
Preference share dividend - - 0.1
12.6 12.8 31.0
Financial income
Bank interest receivable and similar income (0.6) (2.4) (6.9)
Net interest on post-retirement benefits (3.1) (2.1) (4.4)
(3.7) (4.5) (11.3)
Net financial costs 8.9 8.3 19.7
4. Dividends
Pence per 2025 2024 2024
share
First half
First half
Full year
£m
£m
£m
Ordinary
2023 final, paid May 2024 62.0 - 86.6 86.6
2024 interim, paid October 2024 47.0 - - 65.6
2024 final, paid May 2025 63.0 87.9 - -
87.9 86.6 152.2
An interim dividend in respect of 2025 of 48.0p per share, amounting to a
total dividend of £67.0m, was declared by the Directors at their meeting on
25 July 2025. This interim report does not reflect the 2025 interim dividend
payable. The dividend will be paid on 7 October 2025 to shareholders
registered on 29 August 2025.
5. Intangible assets
2025 2024 2024
First half
First half
Full year
£m
£m
£m
Opening net book amount 1,310.6 1,408.5 1,408.5
Exchange differences 7.9 (33.7) (61.4)
Additions 1.3 1.9 3.4
Disposals and write offs - - (0.1)
Reclassifications from property, plant and equipment 0.9 1.7 2.5
Amortisation charge for the period (20.6) (21.4) (42.3)
Impairments -(3.4) -- -
Closing net book amount 1,296.7 1,357.0 1,310.6
An impairment of £3.4m has been recognised related to an acquired technology
asset no longer expected to generate the benefits originally anticipated at
acquisition.
6. Property, plant and equipment
2025 2024 2024
First half
First half
Full year
£m
£m
£m
Opening net book amount 1,082.9 1,044.0 1,044.0
Exchange differences (47.2) (9.3) (12.1)
Additions 44.6 52.3 132.1
Disposals and write offs (0.3) (0.6) (1.3)
Reclassifications to intangible assets (0.9) (1.7) (2.5)
Depreciation charge for the period (40.8) (38.1) (77.3)
Impairments (7.3) - -
Closing net book amount 1,031.0 1,046.6 1,082.9
Impairments of £7.3m have been recognised during the period primarily linked
to the Group's business transformation programme where decisions made resulted
in the requirement for impairment:
· An impairment of £5.6m related to property, plant and equipment
(with a further £16.6m related to right of use assets) relates to the
critical assessment of the Group's supply chain infrastructure as part of the
business transformation programme and subsequent decision in the current
period to optimise the Group's warehousing footprint.
· An impairment of £1.7m related to property, plant and equipment
has also been recognised related to an asset under construction which will no
longer be completed in Japan.
As part of the Group's operational efficiency programme, a number of capacity
optimisation projects are currently being considered where decisions could be
made in the future that may indicate a change in the planned use of certain
assets. These potential changes are still under consideration, with work
ongoing and decisions not yet made. Management will continue to assess this
position on an ongoing basis.
During the period the Group received government grant funding of £4.2m (FY
2024: £36.8m) relating to the US cGMP scale up project. Grant income is
deducted from the cost of the associated asset within the additions line
above.
7. Reconciliation to net debt
2025 2024 2024
First half
First half
Full year
£m
£m
£m
Net movement in cash and cash equivalents 7.6 42.7 (2.3)
Net movement in borrowings and other financial liabilities (59.7) (5.7) 26.5
Change in net debt from cash flows (52.1) 37.0 24.2
Non-cash movement in lease liabilities (6.3) (7.7) (18.2)
Exchange differences 10.6 0.4 (0.7)
(47.8) 29.7 5.3
Net debt brought forward (532.3) (537.6) (537.6)
Net debt carried forward (580.1) (507.9) (532.3)
8. Significant accounting judgements and estimates
The Group's significant accounting policies under UK-adopted international
accounting standards have been set by management with the approval of the
Audit Committee. The application of these policies requires estimates and
assumptions to be made concerning the future and judgements to be made on the
applicability of policies to particular situations. Estimates and judgements
are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be
reasonable under the circumstances. Under UK-adopted international accounting
standards an estimate or judgement may be considered significant if it has a
significant effect on the amounts recognised in the financial statements or if
the estimates have a risk of material adjustment to assets and liabilities
within the next financial year.
There were no significant accounting judgements required when preparing the
Group's accounts.
In the prior year, significant judgement was required in relation to the
determination of CGUs for goodwill impairment purposes due to a change in the
way the Group monitors strategy and financial performance. There have been no
such changes in the way the Group monitors strategy and financial performance
in the period.
The significant accounting estimates required when preparing the Group's
accounts are as follows:
Post-retirement benefits
Post-retirement benefits - the Group's principal retirement benefit schemes
are of the defined benefit type. Recognition of the liabilities under these
schemes require a number of significant assumptions to be made. These
assumptions are made by the Group in conjunction with the schemes' actuaries
and the Directors are of the view that any estimation should be appropriate
and in line with consensus opinion.
The critical accounting estimate specifically relates to the Group's UK
scheme, given the size of the liabilities and their sensitivity to underlying
assumptions. Small changes in these assumptions could result in a material
adjustment to carrying values in the next financial year.
2025 2024
First half Full year
£m
£m
Opening net retirement benefit surplus 104.3 86.7
Current service cost (4.6) (10.1)
Net interest income 3.1 4.4
Employer contributions 2.1 7.1
Benefits paid - 0.2
Remeasurements (4.2) 15.5
Acquisitions - -
Business disposal - -
Exchange difference on overseas schemes 0.5 0.5
Closing net retirement benefit surplus 101.2 104.3
Total market value of assets 873.2 897.6
Present value of scheme liabilities (760.8) (781.4)
Net pension plan asset 112.4 116.2
Post-employment medical benefits (11.2) (11.9)
Net retirement benefit surplus 101.2 104.3
Analysed in the balance sheet as:
Retirement benefit assets 126.3 130.0
Retirement benefit liabilities (25.1) (25.7)
Net retirement benefit surplus 101.2 104.3
8. Significant accounting judgements and estimates (continued)
The Group's accounts include other areas of estimation. Whilst these do not
meet the definition of significant accounting estimates, the recognition and
measurement of certain material assets and liabilities are based on
assumptions. The other areas of accounting estimates are:
Goodwill impairment
Management are required to undertake an annual test for impairment of
indefinite lived assets such as goodwill, or more frequently if impairment
indicators are identified. This review is performed in the second half of the
year. However, the Group is also required to assess for any impairment
triggers at each reporting date. At 30 June 2025, management have performed an
assessment for potential impairment triggers across the Group's CGUs and
Operating Segments including consideration of current performance and future
expectations, and no material impairment indicators were identified.
9. Financial instruments
Financial risk factors
The Group's activities expose it to a variety of financial risks; currency
risk, interest rate risk, liquidity risk, and credit risk. The Group's overall
risk management strategy is approved by the Board and implemented and reviewed
by the Risk Management Committee. Detailed financial risk management is then
delegated to the Group Finance department which has a specific policy manual
that sets out guidelines to manage financial risk. Regular reports are
received from all businesses and regional operating units to enable prompt
identification of financial risks so that appropriate action may be taken. In
the management definition of capital the Group includes ordinary and
preference share capital and net debt.
The condensed interim financial statements do not include all financial risk
management information and disclosures required in the annual financial
statements; they should be read in conjunction with the Group's financial
statements for the year ended 31 December 2024. There have been no changes in
the Group's risk management processes or policies since the year end.
Financial instruments measured at fair value use the following hierarchy;
· Quoted prices (unadjusted) in active markets for identical assets
or liabilities (level 1)
· Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as prices)
or indirectly (that is, derived from prices) (level 2)
· Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs)
(level 3).
All of the Group's financial instruments are classed as level 2 with the
exception of other investments, which are classed as level 3.
Fair values
For financial instruments with a remaining life of greater than one-year, fair
values are based on cash flows discounted at prevailing interest rates.
Accordingly, the fair value of cash deposits and short-term borrowings
approximates to the book value due to the short maturity of these
instruments. The same applies to trade and other receivables and payables
(excluding contingent consideration which is discounted using a risk-adjusted
discount rate). Where there are no readily available market values to
determine fair values, cash flows relating to the various instruments have
been discounted at prevailing interest and exchange rates to give an estimate
of fair value.
The table below details a comparison of the Group's financial assets and
liabilities where book values and fair values differ.
Book value Fair value Book value Fair value
First half
First half
Full year
Full year
2025
2025
2024
2024
£m
£m
£m
£m
US$100m 3.75% fixed rate 10 year note (72.9) (69.0) (79.1) (70.3)
€70m 1.43% fixed rate 10 year note (59.6) (58.9) (59.3) (56.7)
£70m 2.80% fixed rate 10 year note (70.0) (68.5) (70.0) (66.2)
€50m 1.18% fixed rate 8 year note (42.6) (41.4) (42.3) (39.6)
£65m 2.46% fixed rate 8 year note (65.0) (62.0) (65.0) (59.5)
US$60m 3.70% fixed rate 10 year note (43.7) (41.8) (47.5) (43.7)
10. Related party transactions
The Group has no related party transactions in the first six months of the
year, with the exception of remuneration paid to key management and Directors.
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