REG - Croda International - Results for the year ended 31 December 2025
24/02/2026 07:00
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RNS Number : 0805U Croda International PLC 24 February 2026
Press Release
24 February 2026
Results for the year ended 31 December 2025
Encouraging early progress 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 full year results for the year ended 31 December 2025 and
sets out a financial framework for the next three years.
Highlights
Statutory results (IFRS) Adjusted results
Full year ended 31 December 2025 2024 change 2025 2024 Constant change
currency change
Sales (£m) 1,699.4 1,628.1 4.4% 1,699.4 1,628.1 6.6% 4.4%
EBITDA (£m) 396.6 378.3 7.1% 4.8%
EBITDA as a % of sales 23.3% 23.2% - 0.1ppts
Operating profit (£m) 110.1 227.5 (51.6)% 295.3 279.7 7.9% 5.6%
Operating profit margin (%) 17.4% 17.2% - 0.2ppts
Profit before tax (£m) 91.0 207.8 (56.2)% 276.2 260.0 8.4% 6.2%
Basic earnings per share (p) 44.4 113.5 (60.9)% 146.2 142.6 - 2.5%
Ordinary dividend per share (p) 111.0 110.0 0.9%
Free cash flow (£m) 161.6 169.6* - (4.7)%
Net debt (£m) 523.8 532.3 - (1.6)%
(*)Restated to include cash costs of exceptional items in free cash flow, see page 4
Steve Foots, Chief Executive Officer, commented:
"I am encouraged by the early progress we have made in 2025 delivering on our
plan to grow earnings and improve returns in an uncertain trading environment.
Our differentiated business model and higher-growth portfolio have underpinned
progress with Consumer Care and Life Sciences both growing sales, adjusted
margins and profits. Our efforts to drive more consistent growth and transform
the business are beginning to deliver results and whilst there is much more to
do, our confidence in realising further improvements in performance is
highlighted by the three-year financial framework we have set out today."
Continued progress in an uncertain market
· Group sales +6.6% at constant currency comprising:
o Consumer Care sales +8%
n Beauty Actives +6%, Beauty Care +4%, F&F +15%, Home Care +2%
o Life Sciences sales +8%
n Pharma +4%, Crop Protection +14%, Seed Enhancement +8%
o Industrial Specialties sales (2)%
o Q425 sales +5%
· Adjusted operating profit +7.9% at constant currency
o Adjusted operating margin 17.4% (2024: 17.2%); Consumer Care and Life Sciences
margin improving
o Adjusted profit before tax +8.4% to £276.2m (2024: £260.0m); equivalent to
£282.0m at constant currency
o IFRS operating profit of £110.1m (2024: £227.5m); adjustments included
£107.3m impairment charges, £44.6m related to optimising lipids capacity,
with an associated onerous contract provision of £15.9m
· Cash flow improved in the second half year
o £161.6m free cash flow (2024: £169.6m restated*), £133.6m in H2 with lower
working capital and capex
o Leverage ratio fell to 1.3x from 1.5x at 30 June 2025
o Full year dividend increased 1p to 111p (2024: 110p)
Confident of delivering further improvements to financial performance over the next three years
· Driving more consistent sales growth (2025 % sales increases at
constant currency)
o Refocusing innovation with rigorous new framework and reallocation of R&D
resources
n New & Protected Product (NPP) sales +5%: patented sales +9%, new
ingredient sales +10%
n 12% increase in average pipeline value of customer co-creation projects
o Improving customer experience; customer net promoter score +43 (2024: +32)
o Maximising returns from recent investments; period of heightened investment
has come to an end
o Driving consistent sales growth in key markets
n Reinvigorating Beauty - internationalising Beauty Actives capabilities and
delivering benefits to masstige brands; refocusing innovation in Beauty Care
n Rebalancing Pharma - renewed focus on Pharma Ingredients (ingredients for
consumer health and excipients representing ~70% Pharma sales)
· Delivering our transformation programme to enhance growth and
efficiency
o £28m gross benefits realised in 2025 (target: £25m) of ~£100m total
annualised benefits for FY28
o Commenced working capital improvement programme targeting ~£50m reduction for
FY28
· New financial framework to full year 2028 (at constant currency)
based on current market conditions
o Consistent sales growth: 3-6% organic sales growth CAGR 2026-28
o Enhanced profitability: Group adjusted operating margin >20% (2025: 17.4%)
for full year 2028
o Growing cashflows: free cash flow-to-sales ratio >12% (2025: 9.5%) for full
year 2028
o Improving Return on Invested Capital (ROIC): >10% (2025: 8.2%) for full
year 2028
2026 outlook
· For full year 2026 we expect:
o Group organic sales growth within our 3-6% range
n Versus a strong Q125 comparator, when sales were up 9% at constant currency,
we expect sales in Q126 to be similar to the prior year at constant currency
o A further increase in Group adjusted operating margin driven by improving
profitability in Consumer Care and Life Sciences and the benefits of our
transformation programme
o Group full year 2026 adjusted operating profit in line with current market
expectations1 at constant currency
(1)Current market expectations based on company-compiled consensus available
at Croda website (https://www.croda.com/en-gb/investors/analyst-consensus) .
Technical foreign exchange guidance
The financial framework to 2028 and guidance for Group performance in 2026 are
provided on a constant currency basis. Constant currency expectations are
based on the Group's average exchange rates through 2025 which were US$1.32
and €1.17. The US Dollar and the Euro together 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. The
impact from movements in remaining smaller currencies is broadly aligned with
the impact from movements in the US Dollar. If foreign exchange rates in the
period from February 2026 to December 2026 were to reflect the same levels as
January 2026 closing rates, it is anticipated that there would be a negative
impact of approximately £8m on reported operating profit.
Further information:
An investor presentation will be available via webcast at 0900 GMT on 24
February 2026 at www.croda.com/investors (http://www.croda.com/investors) .
Croda will provide an update on first quarter sales performance at the AGM on
22 April 2026.
Investors: David Bishop +44 7823 874428
Reece De Gruchy +44 7826 548908
Media: Charlie Armitstead (FTI Consulting) +44 7703 330269
Mariana Wood +44 7780 987136
Financial summary
Q425 sales by business
Sales Q425 Q424 Constant
£m £m Currency Change
Change
Consumer Care 239.3 223.5 8.9% 7.1%
Life Sciences 137.4 129.3 7.9% 6.3%
Industrial Specialties 42.2 52.8 (18.6)% (19.9)%
Group 418.9 405.6 5.0% 3.3%
FY25 sales by business
Sales FY25 Price/mix Volume Constant currency change Currency FY24
£m £m Change
Consumer Care 972.7 (1.1)% 9.0% 7.9% (2.2)% 920.0 5.7%
Life Sciences 532.2 (5.3)% 13.0% 7.7% (2.2)% 504.3 5.5%
Industrial Specialties 194.5 (10.1)% 7.7% (2.4)% (2.1)% 203.8 (4.6)%
Group 1,699.4 (3.0)% 9.6% 6.6% (2.2)% 1,628.1 4.4%
FY25 and Q425 sales by region
% change in sales versus the prior year FY25 FY25 Q425 Q425
Constant currency change Change Constant currency change Change
EMEA 9% 9% 7% 10%
North America 5% 2% 5% 1%
Latin America 7% 4% 2% (2)%
Asia 4% 0% 3% (2)%
Group 7% 4% 5% 3%
FY25 adjusted profit
FY25 Constant currency change Currency
£m impact FY24
Adjusted profit £m Change
Consumer Care 169.8 7.4% (1.4)% 160.2 6.0%
Life Sciences 116.5 15.6% (3.6)% 104.0 12.0%
Industrial Specialties 9.0 (38.7)% (3.2)% 15.5 (41.9)%
Operating profit 295.3 7.9% (2.3)% 279.7 5.6%
Net interest (19.1) (19.7)
Profit before tax 276.2 8.4% (2.2)% 260.0 6.2%
Notes:
Market information is company compiled, informed by a range of third party
sources.
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;
• Organic results: these reflect constant currency values adjusted to exclude
the impact of acquisitions or disposals in the first year of impact. They are
used by management to measure the performance of each sector before the impact
of portfolio changes are included, in order to assess the like-for-like
performance of the business, thereby providing a consistent basis on which to
make year-on-year comparison. They are seen as similarly useful to
shareholders in assessing the performance of the business;
• 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: this represents Earnings Before Interest, Tax, Depreciation and
Amortisation, calculated as adjusted operating profit plus depreciation and
amortisation. It is used by management and shareholders to assess Group's cash
operating profit performance. EBITDA is a widely used APM, commonly used by
our peers, and is a helpful measure for shareholders that allows for an easier
comparison of the operational performance between companies by excluding
non-cash items and financing effects;
• 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 adjusted 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, less
the cash effect of exceptional items, net capital expenditure and payment of
lease liabilities, plus interest received. The definition of free cash flow
has been revised in the year to deduct exceptional items as part of free cash
flow to demonstrate the level of cash available to shareholders and better
align this APM with the Group's peers. Comparative information has been
restated to reflect the new definition, resulting in restated free cash flow
of £169.6m for 2024 (previously £181.1m). Calculations and reconciliations
are provided in the five-year record of the Group's Annual Report. 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;
• Free cash flow-to-sales ratio: this is free cash flow divided by sales. This
is a new APM and has been included as the Board considers this metric to
assess the level of cash conversion and to evaluate the quality of sales
growth. The Board believes it is useful to shareholders in assessing the
financial performance of the Group;
• Return on invested capital (ROIC): this is adjusted operating profit net of
tax divided by the average adjusted invested capital. Adjusted invested
capital represents net assets adjusted for net debt and net retirement benefit
assets/(liabilities) and is the average of the opening and closing balances.
The definition of ROIC has been revised in the year to remove the adjustment
for earlier goodwill written off to reserves and accumulated amortisation of
acquired intangible assets (both net of deferred tax) to make the definition
more comparable with the Group's peers. Comparative information has been
restated to reflect the new definition, resulting in restated ROIC of 7.7% in
2024 (previously 7.1%). Calculations and reconciliations are provided in the
five-year record of the Group's Annual Report. The Board believes that ROIC is
a key measure of efficient capital allocation and that it is useful to
shareholders in assessing the returns delivered by the Group and the impact of
deploying more capital to grow future returns faster; and,
• New and Protected Products (NPP): these are products which are protected by
virtue of being either newly launched ('new'), protected by intellectual
property ('patented') or by unique quality characteristics ('protected'). NPP
is used by management to measure and assess the level of innovation across the
Group.
CEO Review
We use a number of APMs to assist in presenting information in this statement
which are defined on page 4.
FY25 results - continued progress in an uncertain market
We are encouraged by early progress in 2025 as we implement our plan to grow
earnings and returns. In an uncertain trading environment, Group sales were up
7% at constant currency. Although margins are still significantly below their
medium-term potential, they improved in both key businesses, contributing to
an 8% increase in Group adjusted operating profit. Adjusted profit before tax
was £276.2m (2024: £260.0m), or £282.0m at constant currency, in line with
guidance. Whilst free cash flow (post exceptionals) of £161.6m was £8m lower
than the (restated) prior year, it improved in the second half year due to
lower working capital and capex, with the debt leverage ratio falling to 1.3x
EBITDA (31 Dec 2024: 1.4x; 30 Jun 2025: 1.5x). The Board is proposing a one
pence per share increase to the full year dividend to 111p (2024: 110p).
Consumer Care and Life Sciences grew sales, adjusted operating margins and
profits, with sales up 8% in both businesses at constant currency. In Consumer
Care, Fragrances and Flavours (F&F) continues to outperform peers, and
growth in Beauty was supported by more robust consumer sentiment in North
America in the second half year. In Life Sciences, Crop Protection benefited
from a recovery in demand from larger customers following an extended period
of destocking, and Pharma delivered its strongest performance of the year in
the final quarter despite the US regulatory environment continuing to create
uncertainty for our customers.
Growing earnings and improving returns
We are driving growth and transforming the Business to deliver consistent
sales growth, enhanced profitability and increased cashflows. Our financial
framework to full year 2028 targets 3-6% organic sales CAGR over three years
and at least 20% adjusted operating margin, 12% free cash flow-to-sales ratio
(post exceptionals) and 10% Return on Invested Capital for full year 2028.
Building on our strengths
Our plan builds on the strengths of Croda, both our differentiated business
model with its core capabilities, and a higher-growth portfolio.
Our business model is highly differentiated and enables us to create value
through direct selling and customer-focused innovation. We use mainly natural
raw materials and proprietary downstream processes across derivatisation,
refinement and purification, to provide ~6,000 specialty ingredients to more
than 17,000 customers. A key source of competitive advantage is our direct
sales team who work closely with our customers and R&D colleagues globally
to tailor ingredients for specific applications and formulate multiple
ingredients into solutions.
Our eight business units leverage core capabilities to meet customer needs.
Ingredients sold to Beauty Care, Home Care, Crop Protection and Industrial
Specialties customers, as well as some Pharma ingredients, are produced at
shared manufacturing facilities, accounting for ~60% of our sales and ~70% of
our sales volumes. We go to market in a similar way across all businesses,
creating value for customers by leveraging shared R&D expertise (for
example in biotechnology), formulation advice, and testing to verify the
performance claims customers make based on the solutions we provide.
We have come to the end of a period of heightened investment over the last
five years, repositioning our portfolio for higher growth. This has reinforced
our leadership in innovation (with sales of patented ingredients increasing 9%
in-year, leveraging over 1,700 patents) and sustainability (as validated by
external rankings including our longstanding 'triple A' rating from MSCI). In
2025:
· 89% of our sales were to consumer, pharma and agriculture markets
compared with 73% in 2019
· Local and regional customers (L&Rs), who are growing more
strongly than multinational companies (MNCs) and bringing more products to
market, now represent 82% of Consumer Care sales (2019: 73%) and 56% of Crop
Protection sales (2019: 44%)
· Our footprint outside Europe and North America has also increased
to 48% of sales (2019: 37%), enabling us to access higher-growth countries in
Asia, the Middle East and Latin America
Through this transition, we have moved closer to higher-growth markets,
niches, customers and regions.
So why has our performance been inconsistent over the last three years and
what have we learnt? Sales have been impacted by the market environment, due
to volatile demand post the CV19 pandemic, and a gap in sales volumes
compounded by the divestment of the majority of our Industrials business in
2022. The drivers of our recent profit performance are more specific to Croda,
with operating profit margins adversely impacted by a higher cost base
(particularly operating costs), but product and gross margins remaining
relatively stable, demonstrating the quality of our business. 2020-25 was also
a period of heightened investment which has positioned us for growth but
increased our invested capital base and contributed to lower returns on
invested capital. 2023 was the post-CV19 low point for sales and profit, with
progress in 2024 gathering further momentum in 2025.
Building on the five-point plan we communicated in 2025, we are stepping up
execution to improve performance, by driving growth and transforming the
Business, which enables us to take out costs to enhance profitability,
alongside delivering structural change.
Driving consistent growth
To deliver more consistent growth, we are refocusing innovation, leveraging
our proximity to customers, and maximising returns following a period of peak
investment. As outlined in the Business Reviews, we are also driving
consistent growth in key markets, reinvigorating Beauty - to take advantage of
the full range of opportunities globally, and rebalancing Pharma - to put a
greater emphasis on our core pharma ingredients (ingredients for consumer
health and excipients which represent 70% of sales and grow well at high
margins). Our Business is already well invested so we are not having to ramp
up investment to deliver consistent growth.
Through the pandemic and immediately afterwards, customers prioritised supply
and demand challenges ahead of innovation. With demand having returned, we are
refocusing innovation, introducing a new rigorous Group-wide framework for
prioritising innovation and rebalancing R&D resources to ensure innovation
is more customer focused. This puts greater emphasis on co-creation with
customers and finding new markets for existing ingredients, as well as the
development of new ingredients. It also recognises that sustainable innovation
should be focused on objectives that customers value most and where we can
have the biggest impact, for example augmenting the low carbon footprint of
our ingredients by further reducing the associated scope 3 emissions. Key
metrics demonstrate the good early progress we have made in 2025.
· Our approach to customer co-creation leverages our ability to
tailor individual ingredients and formulate multiple ingredients to meet
specific customer requirements. The average pipeline value of each customer
co-creation project increased by 12% in 2025, with projects including
co-creating PEG-free variants of existing ingredients
· We optimise our existing ingredient range to meet the needs of
particular regions, markets or customers. Projects included developing our
existing lipids range for the pharma generics market
· We develop new ingredients to fulfil unmet needs, with sales of
new ingredients increasing by 10% this year at constant currency. New launches
included Kerabio K31 from our Beauty Care business, a biomimetic bond-builder
for hair that enables brands to compete with market leaders in the hair repair
market, which has a high selling price, more in line with an active
ingredient, providing the potential to enhance profitability
Our direct-to-customer sales model, together with the close alignment of sales
and R&D, represents a significant source of competitive advantage, with
customer retention data showing that we retained ~90% of larger customers from
2019-24 despite significant market volatility. We are improving customer
experience, by gaining a clearer understanding of customer segmentation and
introducing tailored solutions and bespoke service packages for L&Rs,
regional 'giants' and MNCs.
· For local customers, we are regionalising claims testing and
formulation support, for example replicating the world-leading claims testing
that we undertake at our Beauty Actives site in Paris, in other locations in
Asia. Sales to L&R customers grew by 9% in Consumer Care at constant
currency in 2025
· We are deepening relationships with 'Asian giants' across Beauty,
Pharma and Crop Protection with sales to the top 5 Asian Beauty 'giants'
growing 19% over the last 2 years and Crop sales to tier '2' customers up 36%
in 2025 both at constant currency
· We have strong relationships with MNCs across our key markets and
are a strategic partner to every major Beauty brand. In 2025, we grew sales
with 4 of the top 5 Beauty customers and by 14% with our major Crop Protection
customers at constant currency
The strength of our customer relationships is demonstrated by customer Net
Promoter Scores (NPS) which have continued to improve as we play to our
strengths. Customers rate us highly for product quality - the most important
customer need where we rank top of the industry benchmark, as well as
innovative products, sustainability and trust - where we rank in the top
quartile. Through transformation we are driving best practice in order
delivery, customer service and access to information. NPS results for 2025,
based on ~3,500 responses, were:
· Consumer Care +42 (2024: +31)
· Life Sciences +49 (2024: +41)
· Industrial Specialities +32 (2024: +26)
· Croda Group +43 (2024: +32)
We are maximising returns from investments made over the last five years as we
have transitioned our portfolio, to ensure that they deliver incremental sales
and profit growth. This period of heightened investment included both
acquisitions - to enhance our capabilities and accelerate growth in Consumer
Care and Pharma, and growth-focused capex - notably in Asia and
post-acquisition investment to scale up pharma lipids.
· Acquisitions made during this period delivered good growth in
2025, with F&F sales up 15% in constant currency and Avanti lipid sales
for drug research growing double-digit percentage CAGR at constant currency in
the last three years despite customer uncertainty caused by the US regulatory
environment. Sales of ceramides, acquired in 2023 with Solus Biotech, were up
36% at constant currency as we globalise sales, provide data for existing
ceramides and launch new ceramides for scalp and hair health in addition to
skin care
· We are investing selectively in manufacturing as we rebalance our
footprint away from more mature regions to higher-growth countries. We
recently commissioned a new low emissions production centre in Dahej in India
which has a lower cost per unit than our existing manufacturing facility in
India, and have begun commissioning a new F&F and Actives facility in
Guangzhou, China, both of which we can leverage to deliver fast growth across
Asia
· Capital expenditure in large-scale pharma lipid manufacturing
across multiple sites globally has positioned us for potential break-out
growth and was supported by significant funding from the US and UK Governments
under their pandemic preparedness programmes. Whilst we expect to sales of
lipids for drug research to continue to grow, projects requiring the
production at significant scale are expected to take longer to materialise. As
a result, we have taken the decision to put Lamar lipids facility in the USA
on standby, resulting non-cash exceptional charges totalling £60.5m but
minimising future costs while enabling us to fulfil our pandemic-preparedness
commitments to the US Government. Other impairments, as outlined in the CFO
Review, principally related to stopping certain inflight capital programmes
and the exit of a UK distribution centre as streamline the Business and
tighten discipline
Delivering transformation
We are driving structural transformation to enhance both growth and
efficiency, making Croda a better business for the long term. The programme is
fully established with an experienced transformation team and the whole
business has responded well as we push hard to deliver change quickly.
Underpinned by actions to enhance our high-performance culture, and to
leverage AI, data and digitalisation to support decision-making, we are
implementing clearly defined action plans for each of the pillars of the
programme. We continue to expect to deliver total annualised efficiency
benefits of ~£100m and a reduction in working capital of ~£50m both for full
year 2028.
· We are simplifying and optimising our customer and product
portfolios to sharpen our commercial focus. To optimise customers 'at the
tail', we have introduced minimum order values and accelerated the adoption of
'CrodaOn,' a low cost-to-serve online portal for lower value orders which is
now used by over 10% of our customer base. To rationalise our product
portfolio, we are targeting a significant reduction in SKUs in 2026, building
on recent successful pilots
· We are optimising our supply chain to enhance customer service,
creating an end-to-end supply chain that will drive efficiencies and improve
working capital. Optimisation of production capacity is underway focused on
our 11 shared manufacturing sites where we are rationalising processes and
headcount. We are globalising procurement, scaling up improvements across raw
materials, logistics and packaging. We are also exiting a UK distribution
centre following a review of our distribution networks
· We are simplifying our organisation to realign our cost base by
streamlining enabling functions, headcount and management layers. We are
professionalising and streamlining structures in enabling functions and expect
to deliver further efficiencies in 2026 as we implement our rationalisation
plans and through structural savings in indirect costs
With comprehensive action plans in place and the benefits delivered in 2025
slightly ahead of expectations, delivery of our transformation programme will
make an important contribution to enhancing profitability, meaning a
significant proportion of future margin improvement is 'self help,' in our
control, and not dependent on market recovery.
Outlook
Financial framework to full year 2028
With encouraging early progress in 2025 and actions underway to drive
consistent growth and transform the business, we are confident of delivering
an improving performance over the next three years. Our financial framework to
full year 2028, on a constant currency basis, comprises:
· Consistent sales growth from our strengthened portfolio,
targeting an organic increase in sales of 3-6% CAGR 2026 to 2028 assuming
current economic conditions continue
· Enhanced profitability driven by growth and transformation,
targeting a Group adjusted operating margin over 20% for full year 2028
· Sustainable and growing cashflows, targeting a free cash
flow-to-sales ratio (post exceptionals) of over 12% for full year 2028, driven
by improved profitability, low capital expenditure and structural improvements
to working capital
· Improving returns on capital, targeting a Return on Invested
Capital of at least 10% for full year 2028
Guidance for 2026
· For full year 2026 we expect:
o Group organic sales growth within our 3-6% range
n Versus a strong Q125 comparator, when sales were up 9% at constant currency,
we expect sales in Q126 to be similar to the prior year at constant currency
o A further increase in Group adjusted operating margin driven by improving
profitability in Consumer Care and Life Sciences and the benefits of our
transformation programme
o Group full year 2026 adjusted operating profit in line with current market
expectations(1) at constant currency
(1)Current market expectations based on company-compiled consensus available
at Croda website (https://www.croda.com/en-gb/investors/analyst-consensus) .
Technical foreign exchange guidance
The financial framework to 2028 and guidance for Group performance in 2026 are
provided on a constant currency basis. Constant currency expectations are
based on the Group's average exchange rates through 2025 which were US$1.32
and €1.17. The US Dollar and the Euro together 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. The
impact from movements in remaining smaller currencies is broadly aligned with
the impact from movements in the US Dollar. If foreign exchange rates in the
period from February 2026 to December 2026 were to reflect the same levels as
January 2026 closing rates, it is anticipated that there would be a negative
impact of approximately £8m on reported operating profit.
CFO Review
Focused on execution
With a comprehensive transformation programme that is driving both growth and
efficiencies, we are firmly focused on execution. Progress so far has been
encouraging, and we are setting out a financial framework to full year 2028
that outlines further improvements in financial performance. Our ambitions go
beyond these targets, but they provide a roadmap for the next three years and
a framework for tracking future progress.
Sales
Q4 2025 sales by business
Sales Q425 Q424 Constant
£m £m Currency Change
Change
Consumer Care 239.3 223.5 8.9% 7.1%
Life Sciences 137.4 129.3 7.9% 6.3%
Industrial Specialties 42.2 52.8 (18.6)% (19.9)%
Group 418.9 405.6 5.0% 3.3%
Sales in the fourth quarter were slightly stronger than anticipated. Q4 sales
growth was strongest in Consumer Care, up 8.9% at constant currency, against a
modest comparator. Sales were up 7.9% in Life Sciences at constant currency,
also improving sequentially. By contrast, Industrial Specialties sales were
down 18.6% compared with a particularly strong quarter in the prior year.
FY25 sales by business
Sales FY25 Price/mix Volume Constant currency change Currency FY24
£m £m Change
Consumer Care 972.7 (1.1)% 9.0% 7.9% (2.2)% 920.0 5.7%
Life Sciences 532.2 (5.3)% 13.0% 7.7% (2.2)% 504.3 5.5%
Industrial Specialties 194.5 (10.1)% 7.7% (2.4)% (2.1)% 203.8 (4.6)%
Group 1,699.4 (3.0)% 9.6% 6.6% (2.2)% 1,628.1 4.4%
Group sales increased to £1,699.4m (2024: £1,628.1m), up 4.4% or 6.6% at
constant currency, in an uncertain trading environment impacted by
geopolitical tensions, the imposition of US trade tariffs and foreign exchange
volatility. Sales growth at constant currency comprised a 7.9% increase in
Consumer Care, a 7.7% increase in Life Sciences and a 2.4% decrease in
Industrial Specialties.
As part of the actions that we have taken throughout the year to increase
utilisation at our shared production sites, we have been driving targeted
sales of ingredients in Beauty Care, Crop Protection and Industrial
Specialties. Alongside strong sales in Fragrances and Flavours (F&F) this
resulted in a 9.6% increase in sales volumes. As a result of these actions,
price/mix was 3.0% lower with adverse mix the larger component, comprising
both adverse product and business mix. As anticipated, volume growth moderated
in the second half of the year, and price/mix was less adverse than in the
first half year, with like-for-like prices remaining largely consistent with
the prior period.
FY25 sales and Q425 sales by region
% change in sales versus the prior year FY25 FY25 Q425 Q425
Constant currency change Change Constant currency change Change
EMEA 9% 9% 7% 10%
North America 5% 2% 5% 1%
Latin America 7% 4% 2% (2)%
Asia 4% 0% 3% (2)%
Group 7% 4% 5% 3%
Regional sales growth was led by EMEA, with full year sales up 9%, driven by
good demand for Beauty and F&F ingredients in both Europe and the Middle
East, and a recovery in demand from MNCs in Crop Protection, particularly in
the first half year. Sales growth in the Americas improved in the second half
year, supported by a recovery in Beauty demand, particularly in North America.
Asia lagged other regions as exporters in pharma and industrial markets were
adversely affected by the imposition of US trade tariffs.
Quarterly sales (reported) £m Consumer Life Industrial Group
Care Sciences Specialties
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
Q3 2025 241.6 133.8 49.3 424.7
Q4 2025 239.3 137.4 42.2 418.9
Profit and margin
2025 2024
IFRS Adjustments Adjusted IFRS Adjustments Adjusted
£m £m £m £m £m £m
Sales 1,699.4 - 1,699.4 1,628.1 - 1,628.1
Cost of sales (953.7) - (953.7) (894.2) - (894.2)
Gross profit 745.7 - 745.7 733.9 - 733.9
Operating costs (635.6) (185.2) (450.4) (506.4) (52.2) (454.2)
Operating profit 110.1 (185.2) 295.3 227.5 (52.2) 279.7
Net interest charge (19.1) - (19.1) (19.7) - (19.7)
Profit before tax 91.0 (185.2) 276.2 207.8 (52.2) 260.0
Tax (26.3) 43.2 (69.5) (48.2) 11.6 (59.8)
Profit after tax 64.7 (142.0) 206.7 159.6 (40.6) 200.2
2025 2024
Operating profit/(loss) IFRS Adjustments Adjusted IFRS Adjustments Adjusted
£m £m £m £m £m £m
Consumer Care 95.5 (74.3) 169.8 128.4 (31.8) 160.2
Life Sciences 16.3 (100.2) 116.5 85.5 (18.5) 104.0
Industrial Specialties (1.7) (10.7) 9.0 13.6 (1.9) 15.5
Group 110.1 (185.2) 295.3 227.5 (52.2) 279.7
2025 2024
£m
£m
Adjustments
Restructuring and transformation costs (26.3) (6.5)
Environmental provision - (8.5)
Impairment charges (107.3) -
Onerous contract provision (15.9) -
Exceptional items (149.5) (15.0)
Amortisation of intangible assets arising on acquisition (35.7) (37.2)
Total adjustments (185.2) (52.2)
FY25 Constant currency change Currency
£m impact FY24
Adjusted profit £m Change
Consumer Care 169.8 7.4% (1.4)% 160.2 6.0%
Life Sciences 116.5 15.6% (3.6)% 104.0 12.0%
Industrial Specialties 9.0 (38.7)% (3.2)% 15.5 (41.9)%
Operating profit 295.3 7.9% (2.3)% 279.7 5.6%
Net interest (19.1) (19.7)
Profit before tax 276.2 8.4% (2.2)% 260.0 6.2%
Following two years of raw material cost deflation in 2023 and 2024, average
raw materials costs were stable in 2025. We expect a small reduction in the
average cost of raw materials in the first quarter of 2026, but then for them
to be broadly stable for the remainder of the year. People costs were up ~3%,
principally reflecting inflationary salary rises. Both energy and freight
costs, which represent around 2.5% of sales respectively, increased in the
period, predominantly due to higher sales.
IFRS operating profit was £110.1m (2024: £227.5m). IFRS operating profit
included a charge for adjusting items of £185.2m (2024: £52.2m) including a
charge for amortisation of acquired intangibles of £35.7m (2024: £37.2m),
and ongoing restructuring costs associated with business transformation of
£26.3m (2024: £6.5m).
Impairment charges in 2025 totalled £107.3m (2024: £nil) including £44.6m
associated with the decision to place the Lamar lipids facility in the USA on
standby (meaning it is capable of start-up and production within three months)
with an associated onerous contract provision of £15.9m. The decision
minimises future costs and enables us to fulfil our commitments to the US
Government, which provided the majority of the funding for the facility under
its pandemic-preparedness programme. Lamar is one of four GMP facilities
globally where we are able to produce pharma-grade lipids (two in the USA, and
one each in the UK and South Korea), meaning we have ample capacity for future
production. Whilst we expect sales of lipids for drug research to continue to
grow, customer projects requiring production at significant scale are expected
to take longer to materialise. Other impairment charges were a £28.7m charge
related to the decision to cease investments into certain assets under
construction following a detailed review of future capital expenditure
projects, a £22.2m charge associated with the rationalisation of supply chain
infrastructure, including ceasing operations at a leased distribution facility
in the UK, and a £10.9m charge following the reallocation of R&D
resources away from the development of two acquired technology assets. A
number of other capacity optimisation projects are being considered as part of
the transformation programme where decisions that could be made in the future
may result in a reassessment of the carrying value of certain assets.
Group adjusted EBITDA increased 5% to £396.6m (2024: £378.3m) at an adjusted
EBITDA margin of 23.3% (2024: 23.2%.) Group adjusted operating profit was up
6% to £295.3m (2024: £279.7m) or 8% at constant currency, with encouraging
sales growth augmented by improved profitability in Consumer Care and Life
Sciences. Whilst Group adjusted operating margin remains significantly below
its medium-term potential, it improved to 17.4% (2024: 17.2%) benefitting from
improved asset utilisation at our 11 shared manufacturing sites, partly offset
by adverse price/mix and foreign exchange.
Our transformation programme contributed gross benefits of £28m to operating
profit in 2025 (at a cash cost of £26m taken as an exceptional item). Our
target remains ~£100m of total annualised pre-tax benefits by the end of 2027
which annualises in full year 2028. Benefits delivered comprised ~£10m from
optimising supply chain (versus a total opportunity of ~£65m) and ~£15m from
simplifying our organisation (total opportunity: ~£35m), leaving ~£75m gross
benefits to be realised 2026-28 at an additional cash cost of ~£55m over that
period.
Net finance costs were £19.1m (2024: £19.7m). Profit before tax (on an IFRS
basis) was £91.0m (2024: £207.8m) and adjusted profit before tax increased
6% to £276.2m (2024: £260.0m) or by 8% at constant currency to £282.0m. The
effective tax rate on adjusted profit was 25.2% (2024: 23.0%) and the
effective tax rate on IFRS profit was 28.9% (2024: 23.2%). We continue to
expect an effective tax rate on adjusted profit of 26% in future years. IFRS
basic earnings per share (EPS) were 44.4p (2024: 113.5p) and adjusted basic
EPS were 146.2p (2024: 142.6p).
Currency impact
Sterling strengthened against the US Dollar, at US$1.32 (2024: US$1.28) and
was broadly flat against the Euro, at €1.17 (2024: €1.18) but weakened
against both the US Dollar and the Euro in the second half year meaning the
impact of currency translation was less than we anticipated. Currency
translation reduced full year sales by £35.4m, adjusted operating profit by
£6.4m and adjusted profit before tax by £5.8m. This was driven by the
strength of Sterling against the US Dollar 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 US
Dollar and the Euro together represent approximately 65% of the Group's
currency translation exposure with the impact from movements in smaller
currencies is broadly aligned with the impact from movements in the US Dollar.
Retirement benefits
The post-tax asset on retirement benefit plans at 31 December 2025, measured
on an accounting valuation basis under IAS-19, was £85.5m (31 Dec 2024:
£77.7m). 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 the 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.
Cash flow and balance sheet Full year ended 31 December
Cash flow 2025 2024 (restated)
£m
£m
Adjusted operating profit 295.3 279.7
Depreciation and amortisation 101.3 98.6
Adjusted EBITDA 396.6 378.3
Working capital (7.7) 20.9
Interest & tax paid (81.1) (84.4)
Non-cash pension expense (1.0) 2.9
Share-based payments 5.0 5.0
Business transformation costs (24.9) (9.9)
Other cash movements (0.4) 6.6
Net cash generated from operating activities 286.5 319.4
Net capital expenditure (108.2) (137.9)
Interest received 3.0 6.9
Payment of lease liabilities (18.1) (17.5)
Other non-operating cash movements (1.6) (1.3)
Free cash flow 161.6 169.6(1)
Dividends (154.9) (152.2)
Business disposal - (6.8)
Other cash movements (8.9) (3.9)
Net cash flow (2.2) 6.7
Net movement in borrowings 29.3 (9.0)
Net movement in cash and cash equivalents 27.1 (2.3)
(1)Restated to include cash costs of exceptional items in free cash flow, see
page 4
Free cash flow (post exceptionals) reduced 5% to £161.6m (2024: £169.6m
restated) with a working capital outflow of £7.7m compared with an inflow of
£20.9m in 2024 driven by the settlement of a £48m CV19 receivable from 2023.
£133.6m of free cash flow was generated in the second half of 2025 with lower
capex and working capital. As part of transformation, we are targeting
structural improvements to reduce working capital by ~£50m for full year
2028. This will be delivered by improving supplier terms and payments,
standardising receivables terms and optimising collection, and realising
inventory benefits under the modernising supply chain pillar of the programme.
Following a detailed review of in-flight and future investments, capital
expenditure fell to £108.2m (2024: £137.9m), 6% of Group sales. We expect
future capital expenditure to be ~6% of sales, in line with historic norms
prior to the recent period of heightened investment, and that depreciation
will increase by ~£10m in 2026 as the final recent investments come on
stream.
Building on our record of consistent distribution to shareholders, the Board
is proposing a one pence per share increase to the full year dividend to 111p
(2024: 110p), despite the payout ratio of 76% being above our stated policy of
40-50% of adjusted earnings.
Closing net debt was £523.8m (2024: £532.3m), with the debt leverage ratio
falling to 1.3x EBITDA (31 Dec 2024: 1.4x; 30 June 2025: 1.5x). As at 31
December 2025, the Group had committed funding in place of £1,066.6m, with
undrawn long-term committed facilities of £400.9m and £172.8m in cash.
Our capital allocation framework is unchanged, but we are applying it with
greater rigour to improve discipline over:
1. Organic investment to support growth
2. Ordinary dividends to shareholders representing 40-50% of adjusted earnings
through the cycle, with the ordinary dividend at least maintained as we
restore earnings and reduce the payout ratio from the current level
3. Small, selective technology acquisitions from the medium term as we focus on
maximising returns from recent investments in the short term
4. Maintaining leverage in the 1-2x EBITDA range, providing opportunities for the
return of excess capital to shareholders as we generate free cash flow
Future financial framework
Our financial framework to full year 2028 reflects our confidence in
delivering consistent sales growth, improving profitability, growing cash
flows and improving returns on capital (all on a constant currency basis).
Financial KPIs
Sales. Assuming current economic conditions continue, we expect to deliver
consistent sales growth from our strengthened portfolio and are targeting an
organic increase in sales of 3-6% CAGR over three years. We expect both higher
sales volumes and positive price/mix to contribute to sales growth over the
period. Expected organic growth rates (2026-28) by business are:
o Consumer Care 3-6% CAGR
o Life Science 4-7% CAGR
o Industrial Specialties (3)-3% CAGR
Adjusted operating margin. We are enhancing profitability through the benefits
driven by our transformation programme and growing sales. We are targeting a
Group adjusted operating margin over 20% by full year 2028, compared with
17.4% in 2025. This is equivalent to an EBITDA margin over 25%, compared with
23.3% in 2025. We expect both growth and transformation savings to contribute
to margin recovery.
Free cash flow. We expect to deliver growing, sustainable cashflows, driven by
higher profits, lower working capital and low capital expenditure. In line
with peers, our measure is the ratio of free cash flow to sales inclusive of
exceptional cash costs. We expect to structurally reduce working capital by
~£50m for full year 2028 and capital expenditure to be around 6% of sales in
the period. This, combined with higher profits, means we are targeting a free
cash flow-to-sales ratio (post exceptionals) of over 12% for full year 2028,
compared with 9.5% in 2025.
Returns on Invested Capital. We are targeting a Return on Invested Capital
(ROIC) of at least 10% by full year 2028, compared with 8.2% in 2025. To
enhance comparability with peers, we now define ROIC as adjusted operating
profit net of tax divided by average adjusted invested capital, where adjusted
invested capital is net assets plus net debt minus the net pension asset. For
further information see page 4.
Non-financial KPIs
Safe workplace. Our target is a Total Recordable Injury Rate of 0.3 by 2026.
In 2025, TRIR increased to 0.61 (2024: 0.47) due to six of our manufacturing
sites seeing an increased number of recordable incidents. Fortunately, the
associated injuries were of low severity with limited lost time, but we are
disappointed with the step back in performance and are committed to living
safety as a value.
Innovation-led. Sales of New and Protected Products increased 5% at constant
currency, with new ingredient sales up 10%, patented sales up 9%, but
protected sales only up slightly as product mix was impacted by our targeted
action to increase utilisation at shared manufacturing assets, particularly in
Crop Protection and Industrial Specialties. NPP sales were 35% of total
sales (2024: 35%). Our innovation metrics are currently being reviewed to
ensure alignment with our new innovation framework. For 2026, and in line with
the associated remuneration measure, we are targeting organic growth in NPP
sales at least in line with total organic sales growth, to incentivise
continued portfolio differentiation.
Focusing our sustainability strategy. Listening to our customers, we are
adopting a more focused sustainability strategy to 2030, driving deeper impact
across fewer corporate targets. These are reductions in GHG emissions (scopes
1, 2, 3, E&I, and FLAG (covering land-related upstream impacts)) and in
water use impact at our operations in areas with high water risk. With most of
our environmental (and social) risks embedded in our supply chain, we are also
targeting >75% of raw materials from renewable carbon, and zero
deforestation risks in our key bio-based supply chains. Our KPI is total scope
3 GHG emissions, where we are targeting a 26.3% reduction by 2030 from a 2022
baseline in line with our revalidated science-based targets. In 2025, scope
3 GHG emissions were 1,330,561 MTCO2e (2024: 1,190,132 MTCO2e), rising in the
short term due to continued sales volume recovery but 6.4% lower than the 2022
baseline. We continue to be recognised as a sustainability leader in external
rankings with a 'triple A' rating from MSCI and 'A-' from CDP in climate and
water.
Satisfied customers. Our customer satisfaction KPI is a Net Promoter Score
based on a comprehensive customer survey. In 2025, it improved to +43 (2024:
+32), based on ~3,500 responses, with increases in all three businesses. Our
longer-term KPI for customer NPS is currently being developed. For 2026, and
in line with the associated remuneration measure, we are targeting a further
NPS increase for a subset of our larger customers, where the data is most
robust, and will ensure that the sample size continues to be representative.
Engaged employees. Employee engagement is measured by a new tool. Our overall
employee Net Promoter Score increased from +11 in March 2025, when the metric
was introduced to +21 in December. We are targeting a score of +24 by 2028,
ensuring that managers continue to prioritise engagement during a period of
change for our employees as we deliver our transformation programme.
Business review - Consumer Care
Consumer Care comprises four business units:
· Beauty Actives provides peptides - the most effective ingredient
for preventing skin ageing, biotech-derived ingredients, botanicals, and
ceramides for rapid skin moisturisation
· Beauty Care comprises 'effect' ingredients - such as hair care
proteins and mineral sunscreens, and 'formulation' ingredients such as
emulsifiers and emollients which make up the structural chassis of customer
formulations, many of which are differentiated by their performance claims and
sustainability profile
· Fragrances and Flavours (F&F) 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 is focused on two technology platforms which provide
improved efficacy and sustainability - fabric care, with proteins that
increase the lifetime of clothes; and household care, with sustainable
surfactants
Performance in 2025
% change in sales versus the prior year FY25 FY25 Q425 Q425
Constant currency change Change Constant currency change Change
Beauty Actives 6% 5% 12% 11%
Beauty Care 4% 2% 5% 3%
F&F 15% 13% 15% 13%
Home Care 2% 0% (3)% (5)%
Total Consumer Care 7.9% 5.7% 8.9% 7.1%
Full year sales in Consumer Care increased by 5.7% to £972.7m (2024:
£920.0m) or 7.9% at constant currency. F&F was the standout performer,
delivering 15% sales growth at constant currency. This was driven by strong
demand for Parfex's fine fragrances and for Flavours particularly in EMEA,
with momentum continuing in the fourth quarter. Beauty Actives sales were up
6% at constant currency with sales growth improving in the second half year
against a lower comparator and supported by more robust consumer sentiment in
North America. Beauty Care sales were up 4% at constant currency driven by
higher sales volumes and aided by our deliberate actions to optimise plant
utilisation in certain parts of the portfolio. Pricing in both of our Beauty
businesses was positive in Q4. Sales grew 2% at constant currency in Home
Care, the smallest business unit in Consumer Care, with a weaker performance
in the second half following completion of a major product relaunch by a
customer, compounded by order phasing.
Adjusted operating profit increased by 6.0% to £169.8m (2024: £160.2m) or by
7.4% at constant currency. Although the adjusted operating margin of 17.5%
(2024: 17.4%) remains significantly below its medium-term potential, it
improved slightly compared with both the prior year and H125 due to a stronger
performance in Beauty. IFRS operating profit was £95.5m (2024: £128.4m).
Strategic priorities and progress
In line with Group priorities, we are driving more consistent growth in
Consumer Care by refocusing innovation, improving customer experience and
maximising returns from recent investments. We are also reinvigorating Beauty
and enabling continued fast growth in F&F to take full advantage of
opportunities in these key Consumer Care markets.
Refocusing innovation
We are refocusing innovation, introducing a new rigorous Group-wide framework
and re-balancing R&D resources to place greater emphasis on co-creation
with customers and finding new markets for existing ingredients, as well as
ramping up the development of new ingredients.
· Customer co-creation involves application-focused innovation,
where we work in close collaboration with customers of to meet their
performance requirements or help them realise a specific opportunity. An
example of bespoke ingredients created in this way is a PEG-free rheology
modifier that we developed in collaboration with a global beauty brand
· To accelerate the sales of an existing ingredient, we enhanced
the performance of Silverfree, a peptide that reduces grey hair, opening up a
new opportunity with an FMCG multinational
· We have ramped up the development of new ingredients with sales
increasing by 10% at constant currency. Launches included:
o Zenakine, an active which enhances skin's resistance to physical and emotional
stress, thereby reducing skin fatigue and premature ageing, with customer
launches in Europe and Asia
o Kerabio K31, a patented biomimetic bond builder for hair repair, a market
which is growing 9% a year. We are first-to-market with a multi-customer
ingredient that enables brands to compete with market leaders, which has been
sampled by 500 customers since its launch in March 2025
· 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
Improving customer experience
We are improving customer experience through our transformation programme,
which is sharing best practice, and clearer customer segmentation, enabling us
to tailor solutions to differing customer needs.
· 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, particularly L&R customers who are
continuing to grow strongly. Our prices are normally higher to smaller
customers because we provide them with additional support, so less
concentration in our customer base is providing more opportunities for us at
good margins:
o Sales to L&R customers increased 9% in constant currency
o They now represent 82% of Consumer Care sales (2024: 80%)
· We are particularly focused on fast-growing 'regional giants' in
key Asian markets such as China, Japan, South Korea, Indonesia and India,
where we have grown sales to our top 5 regional customers by 19% CAGR at
constant currency over the last two years
· As a strategic partner to all major Beauty brands, we grew with
four of the top five beauty customers, reflecting their renewed appetite for
innovation
The Consumer Care customer Net Promoter Score (NPS), our KPI for customer
service, increased to +42 (2024: +31).
Maximising returns from investments
We are maximising returns from recent investments which have included both
acquisitions, to expand Beauty Actives and establish an F&F business, and
a period of heightened capital expenditure, particularly in fast-growth
countries in Asia.
Our capability in ceramides, active ingredients for skin barrier protection
and rapid moisturisation, was acquired with Solus Biotech in 2023, with
commercialisation initially taking longer than anticipated. With ceramides now
being sold across our global sales network and upgraded data packages to
verify performance claims, sales were up 36% at constant currency albeit from
a low base. We are driving further growth by:
· 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, including new ceramides that enhance scalp health
for stronger hair, the first application beyond skin care
Asia represents the highest-growth Beauty market and has been the
fastest-growing region for Croda Beauty over the last three years. We have
supported that growth with selective expenditure in new manufacturing capacity
including a new low emissions production facility in Dahej, India which is now
fully operational and will enable further growth across Asia. We are also
commissioning a new facility in Guangzhou, China for fragrances and actives.
Accelerating growth in key markets
Reinvigorating Beauty
Our Beauty businesses have a ~10% share in the $8bn beauty ingredients with
top three positions in niches growing faster (3-7%) than the beauty retail
market (2.7%) at profit margins that are accretive to the Group. Following a
period of inconsistent performance in volatile markets, they delivered an
improved performance in 2025 with sales up 6% in Beauty Actives and by 4% in
Beauty Care both at constant currency. To deliver consistent sales growth we
are reinvigorating Beauty, building on its reputation for innovation and
strong customer relationships to capitalise on the full range of opportunities
globally. With greater demand outside Europe, we are internationalising our
Actives capabilities beyond the traditional centre in Paris, including
regionalising testing and claims substantiation capabilities particularly in
Asia to enable greater tailoring to specific country needs. We are also
delivering benefits to masstige products, which helped support increased sales
growth in the second half year particularly in North America, and where the
margins that we make are similar to when we supply ingredients to prestige
brands. In Beauty Care, we have the broadest portfolio of innovative
ingredients. Enabled by the new innovation framework, we are commercialising
and scaling up our biotech pipeline. We are also showcasing Beauty Care as
delivery systems for Actives, leveraging our ability to deliver tailor-made
solutions to customers comprising multiple ingredients.
Enabling continued fast growth in F&F
F&F is a small but fast-growing player in a $25bn addressable market and
is focused on L&R customers mainly in emerging markets who are growing
twice as fast as the market as a whole (3.3% CAGR). The business continued to
grow ahead of peers in 2025, delivering 15% sales growth at constant currency,
comprising a 13% increase in sales of fragrances and 24% increase in sales of
flavours. Demand was particularly strong in Europe, the Middle East and
Africa. To enable continued fast growth in F&F, we are leveraging its core
strengths which include its agile model for higher-growth L&R customers
and strong focus on fast-growth emerging markets. This is being supported by
light-touch capital expenditure to expand manufacturing capacity and
geographic footprint, following major investments over the last three years.
Recent investments have included the expansion of fine fragrances at our
dedicated innovation and production facilities in Grasse in France, as well as
the new manufacturing facility in Guangzhou, China due to commence operations
in 2026. F&F is also a focus area for R&D investment particularly for
innovation in micro-encapsulation and odour-neutralising fragrances.
Future sales growth
Assuming current economic conditions continue, we are targeting an organic
increase in sales in Consumer Care of 3-6% CAGR 2026-28.
Business review - Life Sciences
Life Sciences focuses on providing delivery systems for active pharmaceutical
and agricultural products. It comprises three business units:
· Pharma provides ingredients and solutions for a wide range of
different drugs and vaccines 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 ingredients used in health care
· Crop Protection offers adjuvants and formulation aids that
improve performance and delivery of crop protection products
· Seed Enhancement provides seed coating systems and enhancement
technologies to improve germination, stimulate development of seeds and
increase crop yields
Performance in 2025
% change in sales versus the prior year FY25 FY25 Q425 Q425
Constant currency change Change Constant currency change Change
Pharma 4% 2% 7% 5%
Crop Protection 14% 11% 12% 11%
Seed Enhancement 8% 7% 4% 4%
Total Life Sciences 7.7% 5.5% 7.9% 6.3%
Full year sales in Life Sciences were increased 5.5% to £532.2m (2024:
£504.3m) or by 7.7% at constant currency. Pharma sales grew by 4% at constant
currency, with the regulatory environment in the USA creating uncertainty for
our customers and impacting sales, particularly for vaccine adjuvants. The
fourth quarter was Pharma's strongest quarter of 2025, driven by higher
excipient sales for both small molecule and biologic applications. Lipid sales
for drug research also improved in Q4. Full year sales in Crop Protection were
up 14% at constant currency driven by the recovery in demand from larger crop
science customers following an extended period of destocking, aided by our
proactive actions. Although momentum in Crop continued into the fourth
quarter, demand in 2026 is not expected to benefit from the customer inventory
rebuild that positively impacted our performance in 2025. Seed Enhancement
grew sales by 8% at constant currency, with its predominantly services
business model continuing to deliver consistent sales growth.
Adjusted operating profit increased by 12.0% to £116.5m (2024: £104.0m) or
by 15.6% at constant currency. Although the adjusted operating margin of 21.9%
(2024: 20.6%) remains significantly below its medium-term potential, margin
improved compared with both the prior year and H125 driven by the recovery in
Crop volumes despite the associated negative impact on business mix. IFRS
operating profit was £16.3m (2024: £85.5m).
Strategic priorities and progress
To take full advantage of opportunities in key Life Sciences markets we are
rebalancing Pharma and driving differentiation in our Agriculture businesses.
Across the Life Sciences portfolio we are refocusing innovation, improving
customer experience and maximising returns from investments in line with Group
priorities. Reflecting the progress we have made in improving customer
experience, the customer Net Promoter Score (NPS) for Life Sciences increased
to +49 (2024: +41).
Rebalancing Pharma
Pharma has a ~15% share of a $2bn advanced excipients, adjuvants and delivery
systems market and a top three supplier in niches growing at least 5% CAGR. We
are rebalancing Pharma, allocating resources to accelerate sales of
longer-standing ingredients for consumer health and small molecule APIs, as
well as our advanced solutions for the delivery of novel biologic drugs and
gene therapies which have been our principal focus in recent years. This
rebalancing, augmented by the relaunch of our flagship ingredients in core
markets, contributed to sales growth in 2025. It also recognises that each
sub-segment has the potential for at least mid-single digit percentage sales
growth at margins that are accretive to Group return on sales.
Improving customer experience
In a market that is growing but also becoming more complex, we are improving
customer experience by evolving our Pharma business into two portfolio-led
focus areas. These are:
1. Pharma Ingredients, representing over two thirds of total Pharma sales,
and providing core consumer health ingredients and advanced excipients
principally for established drugs. This is now organised on a regional basis,
leveraging long-standing customer relationships and Croda's regional model
2. Pharma Solutions, with just under one third of Pharma sales, providing
lipid technologies and vaccine adjuvants. This is now organised as a
specialised global business working closely with customers and partners
principally on new drugs in development
Refocusing innovation
We are refocusing innovation, optimising our approach for each of the
different sub-segments:
· In Core Ingredients, we are leveraging Croda's broader skin care
expertise for topical applications
· To strengthen our leadership in Advanced Ingredients, we are
creating new high-purity excipients for injectables and new bioprocessing
aids. For example, our recently commissioned super refining process at our
site in Leek, UK has supported the launch of Super Refined Poloxamer 188, used
as both an aid to cell growth during upstream bioprocessing as well as an
excipient
· In lipid technologies, we are expanding our range of more than
2,000 lipids for drug research, for example through a recent partnership with
Certest, and targeting further markets for lipids, for example in the generics
segment
· To accelerate development of sustainable vaccine adjuvants, we
are working with external partners with recent portfolio additions including
sustainable squalene which has demonstrated extended stability compared with
competitors' shark-based alternatives
Maximising returns from recent investments
Capital has been allocated to Pharma during the recent period of heightened
investment through both focused capex and M&A. Acquisitions during this
period were:
· Avanti Research, in 2020. Sales of lipids for drug research have
grown double-digit percentage CAGR over the last three years
· Phospholipids, acquired with Solus Biotech in South Korea in
2023, which are used as delivery systems and for intravenous nutrition. The
clarification of the go-to-market model for Pharma Ingredients will help
maximise the value of the phospholipids as we globalise sales through our
regional sales network
Capital expenditure has been focused on full-scale lipids production at
multi-purpose cGMP sites in Lamar, Pennsylvania, and Leek, UK, as well on a
smaller scale at the Avanti site in Alabama (our global centre for lipid
development). The total cost to Croda of the programme is ~£150m over the
last five years, below previous estimates as we have revised the scope, of
which ~£140m had been spent to end of 2025. The scale-up capacity at Lamar
was mainly funded by the US Government under its pandemic preparedness
programme to support vaccine production in the event of a future pandemic. The
Leek expansion also received similar UK Government support. The investment has
provided us with a significant competitive advantage for future break-out
growth and assets in all major regions (in the USA, UK, and the site in Korea
where we produce phospholipids). With drug development timescales having
reverted to their pre-pandemic norms and clinical programmes taking longer to
commercialise, our assessment is that whilst demand for lipids for drug
research will continue to grow, large-scale production capacity outstrips
current needs. We have therefore decided to put the new Lamar plant on standby
to address overcapacity and minimise costs.
Driving differentiation in our Agriculture businesses
Our Agriculture businesses have a ~9% share of a $4bn addressable market with
a top three position in niches growing at least 1.5x market growth (2.6%
CAGR). As regulations tighten and crop care formulations become more complex,
Agriculture customers have significant development needs providing us with
opportunities to innovate. This is reflected in strong demand for the highly
differentiated ingredients at the top end of our portfolio, which have grown
at ~10% CAGR since 2019. We are therefore driving further differentiation in
Crop Protection and Seed Enhancement, our two Agriculture businesses.
Refocusing innovation
In Crop Protection, we are focused on enhancing portfolio differentiation, by
developing new adjuvant effects that meet unmet needs (for example for
rain-fastness), expanding our portfolio through technology partnerships, and
enhancing supporting data to prove performance. The lower carbon footprint is
also an important point of differentiation, particularly at the lower end of
the portfolio.
In Seed Enhancement, innovation is focused on 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, as well as countering
abiotic stress in seeds due to extreme heat, drought and high soil salinity.
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.
Improving customer experience
The customer environment in Agriculture has been changing with MNCs focusing
on their core activities, the rise of generic manufacturers, particularly in
China, and ongoing consolidation of smaller biopesticide specialists. We are
responding to this dynamic customer environment through comprehensive customer
segmentation and the continued regionalisation of our R&D and formulation
expertise.
Aided by inventory rebuild by our larger customers following an extended
period of destocking, sales to MNCs grew by 14% at constant currency in 2025,
with a 36% increase in sales 'tier 2' customers. Local and Regional customers
now represent 56% of sales, in line with the prior year, and up from 44% in
2019.
Maximising returns from recent investments
Our Agriculture businesses have limited capital requirements but the new
production centre in Dahej, India will support Crop Protection growth in
Asia.
Future sales growth
Assuming current economic conditions continue, we are targeting an organic
increase in sales in Life Sciences of 4-7% CAGR 2026-28.
Business review - Industrial Specialties
Industrial Specialties (IS) contributes to the efficiency of our manufacturing
model with sales exclusively from our shared manufacturing sites leveraging
available capacity and core chemistries into target markets. Full year sales
in Industrial Specialities were down 4.6% to £194.5m (2024: £203.8m) or by
2.4% at constant currency. This comprised growth in core sales offset by a
reduction in sales via a supply agreement. Sales volumes were 7.7% higher but
price/mix was 10.1% lower, adversely impacted by a higher proportion of
by-product and co-stream sales. Q4 sales were 18.6% lower at constant currency
against a particularly strong comparator and primarily reflecting the phasing
of co-stream sales. Full year adjusted operating profit was £9.0m (2024:
£15.5m), with the prior year comparator benefiting from particularly
favourable product mix, and IFRS loss was £(1.7)m (2024: £13.6m profit).
Assuming current economic conditions continue, we are targeting an organic
increase in sales in Industrial Specialties of (3)-3% CAGR 2026-28, which is
expected to include an increase in core sales as we target selective growth
opportunities.
Other matters
Principal risks
Our risk management processes, policies and the principal risks and
uncertainties facing the Group are set out in the Group's Annual Report and
Accounts. Our risk management processes and policies remain largely consistent
with the prior year, with minor adjustments being made in conjunction with the
deployment of a new integrated risk management system.
The Group's principal risks are: 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.
Four principal risks intensified during 2025:
· 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
Croda International Plc
Summary Financial Statements for the Year Ended 31 December 2025
Group Income Statement
for the year ended 31 December 2025
Note 2025 2025 2025 2024 2024 2024
Reported
Reported
Adjusted
Adjustments
Total
Adjusted
Adjustments
Total
£m
£m
£m
£m
£m
£m
Revenue 2 1,699.4 - 1,699.4 1,628.1 - 1,628.1
Cost of sales (953.7) - (953.7) (894.2) - (894.2)
Gross profit 745.7 - 745.7 733.9 - 733.9
Operating costs (450.4) (185.2) (635.6) (454.2) (52.2) (506.4)
Operating profit 2 295.3 (185.2) 110.1 279.7 (52.2) 227.5
Financial costs 3 (28.3) - (28.3) (31.0) - (31.0)
Financial income 3 9.2 - 9.2 11.3 - 11.3
Profit before tax 276.2 (185.2) 91.0 260.0 (52.2) 207.8
Tax 4 (69.5) 43.2 (26.3) (59.8) 11.6 (48.2)
Profit after tax for the year 206.7 (142.0) 64.7 200.2 (40.6) 159.6
Attributable to:
Non-controlling interests 2.7 - 2.7 1.1 - 1.1
Owners of the parent 204.0 (142.0) 62.0 199.1 (40.6) 158.5
206.7 (142.0) 64.7 200.2 (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
Reported
Reported
Adjusted
Total
Adjusted
Total
Earnings per 10.61p ordinary share
Basic 5 146.2 44.4 142.6 113.5
Diluted 146.1 44.4 142.5 113.5
Ordinary dividends paid in the year
Interim 6 48.0 47.0
Final 6 63.0 62.0
Group Statement of Comprehensive Income
for the year ended 31 December 2025
2025 2024
£m
£m
Profit after tax for the year 64.7 159.6
Other comprehensive income/(expense):
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of post-retirement benefit obligations 2.5 15.5
Tax on items that will not be reclassified (0.5) (3.9)
2.0 11.6
Items that have been or may be reclassified subsequently to profit or loss:
Currency translation (2.8) (90.3)
(2.8) (90.3)
Other comprehensive expense for the year (0.8) (78.7)
Total comprehensive income for the year 63.9 80.9
Attributable to:
Non-controlling interests 2.2 0.9
Owners of the parent 61.7 80.0
63.9 80.9
Arising from:
Continuing operations 63.9 80.9
Group Balance Sheet
at 31 December 2025
Note 2025 2024
£m
£m
Assets
Non-current assets
Intangible assets 7 1,284.2 1,310.6
Property, plant and equipment 8 985.8 1,082.9
Right of use assets 63.3 85.0
Investments 1.9 1.9
Deferred tax assets 31.0 14.7
Retirement benefit assets 9 137.7 130.0
2,503.9 2,625.1
Current assets
Inventories 370.5 367.9
Trade and other receivables 363.8 349.5
Cash and cash equivalents 172.8 166.8
907.1 884.2
Liabilities
Current liabilities
Trade and other payables (280.5) (274.0)
Borrowings and other financial liabilities (148.1) (35.0)
Lease liabilities (14.5) (13.2)
Provisions (6.8) (6.5)
Current tax liabilities (6.7) (7.8)
(456.6) (336.5)
Net current assets 450.5 547.7
Non-current liabilities
Borrowings and other financial liabilities (470.3) (580.2)
Lease liabilities (63.7) (70.7)
Other payables (1.0) (1.1)
Retirement benefit liabilities 9 (23.4) (25.7)
Provisions (29.4) (17.3)
Deferred tax liabilities (164.5) (180.9)
(752.3) (875.9)
Net assets 2,202.1 2,296.9
Equity
Ordinary share capital 15.1 15.1
Share premium account 707.7 707.7
Reserves 1,464.3 1,559.7
Equity attributable to owners of the parent 2,187.1 2,282.5
Non-controlling interests in equity 15.0 14.4
Total equity 2,202.1 2,296.9
Group Statement of Changes in Equity
for the year ended 31 December 2025
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 year - - - 158.5 1.1 159.6
Other comprehensive (expense)/income for the year - - (90.1) 11.6 (0.2) (78.7)
Total comprehensive (expense)/income for the year - - (90.1) 170.1 0.9 80.9
Transactions with owners:
Dividends on equity shares 6 - - - (150.7) - (150.7)
Share-based payments - - - 1.6 - 1.6
Transactions in own shares - - - (9.8) - (9.8)
Total transactions with owners - - - (158.9) - (158.9)
Changes in ownership interests:
Dividends paid to non-controlling interest - - - - (2.1) (2.1)
Total changes in ownership interests - - - - (2.1) (2.1)
Total equity at 31 December 2024 15.1 707.7 (100.4) 1,660.1 14.4 2,296.9
At 1 January 2025 15.1 707.7 (100.4) 1,660.1 14.4 2,296.9
Profit after tax for the year - - - 62.0 2.7 64.7
Other comprehensive (expense)/income for the year - - (2.3) 2.0 (0.5) (0.8)
Total comprehensive (expense)/income for the year - - (2.3) 64.0 2.2 63.9
Transactions with owners:
Dividends on equity shares 6 - - - (154.9) - (154.9)
Share-based payments - - - 5.1 - 5.1
Transactions in own shares - - - (7.3) - (7.3)
Total transactions with owners - - - (157.1) - (157.1)
Changes in ownership interests:
Dividends paid to non-controlling interest - - - - (1.6) (1.6)
Total changes in ownership interests - - - - (1.6) (1.6)
Total equity at 31 December 2025 15.1 707.7 (102.7) 1,567.0 15.0 2,202.1
Other reserves include the Capital Redemption Reserve of £0.9m (2024: £0.9m)
and the Translation Reserve of £(103.6)m (2024: £(101.3)m).
Group Statement of Cash Flows
for the year ended 31 December 2025
Note 2025 2024
£m
£m
Cash generated by operations
Adjusted operating profit 295.3 279.7
Exceptional items 2 (149.5) (15.0)
Amortisation of intangible assets arising on acquisition (35.7) (37.2)
Operating profit 110.1 227.5
Adjustments for:
Depreciation and amortisation 137.0 135.8
Impairments on intangible assets and property, plant and equipment 107.3 -
Loss on disposal and write-offs of intangible assets and property, plant and - 0.6
equipment
Net provisions charged 24.6 13.4
Share-based payments 5.0 5.0
Non-cash pension expense (1.0) 2.9
Net-monetary adjustment 1.5 5.0
Cash paid against operating provisions (9.2) (7.3)
Movement in inventories (7.3) (39.3)
Movement in receivables (16.6) 21.3
Movement in payables 16.2 38.9
Cash generated by operations 367.6 403.8
Interest paid (25.3) (28.5)
Tax paid (55.8) (55.9)
Net cash generated from operating activities 286.5 319.4
Cash flows from investing activities
Purchase of property, plant and equipment (117.7) (178.4)
Receipt of government grants 11.4 43.0
Purchase of other intangible assets (2.2) (3.4)
Proceeds from sale of property, plant and equipment 0.3 0.9
Tax paid on business disposals - (6.8)
Cash paid against non-operating provisions (1.6) (1.3)
Interest received 3.0 6.9
Net cash used in investing activities (106.8) (139.1)
Cash flows from financing activities
New borrowings 181.8 440.4
Repayment of borrowings (152.5) (449.4)
Payment of lease liabilities (18.1) (17.5)
Net transactions in own shares (7.3) (1.8)
Dividends paid to equity shareholders 6 (154.9) (152.2)
Dividends paid to non-controlling interests (1.6) (2.1)
Net cash used in financing activities (152.6) (182.6)
Net movement in cash and cash equivalents 27.1 (2.3)
Cash and cash equivalents brought forward 141.7 150.2
Exchange differences (0.2) (6.2)
Cash and cash equivalents carried forward 168.6 141.7
Cash and cash equivalents carried forward comprise:
Cash at bank and in hand 172.8 166.8
Bank overdrafts (4.2) (25.1)
168.6 141.7
Reconciliation to net debt
Note 2025 2024
£m
£m
Net movement in cash and cash equivalents 27.1 (2.3)
Net movement in borrowings and other financial liabilities (11.2) 26.5
Change in net debt from cash flows 15.9 24.2
Non-cash movement in lease liabilities (14.1) (18.2)
Exchange differences 6.7 (0.7)
8.5 5.3
Net debt brought forward (532.3) (537.6)
Net debt carried forward (523.8) (532.3)
Notes to the Summary Financial Statements
1. Basis of preparation
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.
The financial information set out above does not constitute the Group's
statutory financial statements for the years ended 31 December 2025 or 2024
but is derived from those financial statements. Statutory financial statements
for 2024 have been delivered to the Registrar of Companies and those for 2025
will be delivered following the Company's Annual General Meeting. The auditor
has reported on those financial statements; their reports were unqualified,
did not draw attention to any matters by way of emphasis without qualifying
their report and did not contain statements under s498(2) or (3) of the
Companies Act 2006.
Going concern basis
The consolidated financial statements have been prepared on a going concern
basis which the Directors believe to be appropriate for the following reasons:
At 31 December 2025 the Group had £1,066.6m of committed debt facilities
available from its banking group, USPP bondholders and lease providers, with
principal maturities between 2026 and 2030, of which £400.9m (2024: £418.0m)
was undrawn, together with cash balances of £172.8m (2024: £166.8m). 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 £131.0m 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 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 almost 80% to trigger an event
of default prior to 30 June 2027. This scenario includes some mitigating
actions to conserve cash, including reducing dividends and capital
expenditure. Throughout this scenario, the Group continues to have significant
liquidity headroom. The Directors do not consider this a plausible scenario.
This is consistent with the bottom-up risk scenario modelling for the
long-term viability statement which considered severe but plausible,
individual, and combined scenarios, none of which trigger an event of default.
Accordingly, the consolidated financial statements have been prepared on a
going concern basis.
Climate change
The Group has long recognised the scale of the climate emergency and considers
this to offer both opportunities and risks in the future. The Group's current
climate change strategy focuses on reducing its carbon footprint and
increasing its use of bio-based raw materials, whilst the benefits in using
its ingredients will enable more carbon to be saved than is emitted through
operations and supply chain.
The impact of climate change has been considered in the preparation of these
financial statements, including the risks identified as part of the Task Force
on Climate-related Financial Disclosures (TCFD). None of these risks had a
material effect on the consolidated financial statements of the Group. In
particular, the Directors have considered the impact of climate change in
respect of the following areas:
· Going concern and viability of the Group over the next three
years;
· Post-retirement benefit obligations;
· Carrying value and useful economic lives of property, plant and
equipment; and
· The discounted cashflows included in the value in use calculation
used in the annual goodwill impairment testing.
Whilst there is currently no material impact expected from climate change, the
Group is aware of the ever-changing risks related to climate change and will
continue to develop its assessment of the impact on the financial statements.
Changes in accounting policy
In preparing this financial information, management has used the principal
accounting policies that will be detailed in the Group's Annual Report for
2025 and which are unchanged from the prior year.
(a) New and amended standards adopted by the Group
One amendment to accounting standards and interpretations is effective for
annual periods beginning on or after
1 January 2025 and have been applied in preparing these consolidated financial
statements. This did not have a significant effect on the consolidated
financial statements of the Group.
(b) New standards and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are
effective for annual periods beginning on or after 1 January 2026 and have not
been applied in preparing the consolidated financial statements. The Group is
assessing the impact of these new standards and the Group's financial
reporting will be presented in accordance with these standards from 1 January
2026 or 1 January 2027 as applicable.
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.
2025 2024
£m
£m
Income statement
Revenue
Consumer Care 972.7 920.0
Life Sciences 532.2 504.3
Industrial Specialties 194.5 203.8
Total Group revenue 1,699.4 1,628.1
Adjusted operating profit
Consumer Care 169.8 160.2
Life Sciences 116.5 104.0
Industrial Specialties 9.0 15.5
Total Group operating profit (before exceptional items and amortisation of 295.3 279.7
intangible assets arising on acquisition)
Exceptional items and amortisation of intangible assets arising on acquisition (185.2) (52.2)
Total Group operating profit 110.1 227.5
In the following table, revenue has been disaggregated by sector and
destination. This is the primary management information that is presented to
the Group's Executive Committee.
Europe, Middle East & Africa North Latin Asia Reported
£m
Total
America America £m
£m
£m £m
Revenue 2025
Consumer Care 427.2 190.0 103.5 252.0 972.7
Life Sciences 188.8 170.3 76.0 97.1 532.2
Industrial Specialties 69.1 40.8 7.2 77.4 194.5
Total Group revenue 685.1 401.1 186.7 426.5 1,699.4
Revenue 2024
Consumer Care 383.2 188.7 100.7 247.4 920.0
Life Sciences(1) 167.8 166.8 72.5 97.2 504.3
Industrial Specialties 75.5 37.5 7.3 83.5 203.8
Total Group revenue 626.5 393.0 180.5 428.1 1,628.1
(1)Group revenue of £10.7m recognised in 2024 (within the Life Sciences
sector) has been reclassified from EMEA (£5.7m) and Asia (£5.0m) to North
America following a review of the destination of the Group's commercial
relationships for certain customers.
Adjustments
2025 2024
£m
£m
Exceptional items - operating profit
Restructuring costs - (3.0)
Business transformation costs (26.3) (3.5)
Environmental provision - (8.5)
Onerous contract provision (15.9) -
Intangible asset impairment (note 7) (10.9) -
Property, plant and equipment impairment (note 8) (78.9) -
Right of use asset impairment (17.5) -
Exceptional items (149.5) (15.0)
Amortisation of intangible assets arising on acquisition (35.7) (37.2)
Total adjustments (185.2) (52.2)
The exceptional items in the current year relate to:
· business transformation costs as part of the Group-wide
transformation programme which commenced in the prior year. The programme is
expected to continue until 2027 and involves right-sizing and optimising the
organisation. The costs of £26.3m include £10.0m redundancy alongside other
costs such as legal and professional and project management costs;
· property, plant and equipment (£78.9m), right of use assets
(£17.5m) and intangible assets (£10.9m) impairments. Further detail on these
impairments is included in notes 7 and 8; and
· the recognition of an onerous contract provision related to
unavoidable costs at the lipids scale up facility in the USA following the
decision in the year to place the site on standby. The Group is required to
adhere to the provisions of the pandemic preparedness agreement with the US
Government and ensure the facility is capable of production within three
months' notice for a period of 10 years and requires a minimum level of costs
are incurred to meet these requirements without any anticipated income stream.
The exceptional items in the prior year related to business transformation
costs, restructuring costs related to changes in the Group's operating model
and an increase to environmental provisions in the Americas.
3. Net financial costs
2025 2024
£m
£m
Financial costs
Interest payable on borrowings 24.0 25.8
Interest on lease liabilities 2.8 2.8
Other bank loans and overdrafts 1.4 2.3
Preference share dividend 0.1 0.1
28.3 31.0
Financial income
Bank interest receivable and similar income (3.0) (6.9)
Net interest on post-retirement benefits (6.2) (4.4)
(9.2) (11.3)
Net financial costs 19.1 19.7
4. Tax
2025 2024
£m
£m
Analysis of tax charge for the year
United Kingdom current tax 1.8 (0.8)
Overseas current tax 54.7 60.8
Global minimum top-up tax 0.5 1.2
Deferred tax (30.7) (13.0)
26.3 48.2
The effective adjusted corporate tax rate before exceptional items of 25.2%
(2024: 23.0%) is in line with the UK's standard tax rate of 25.0%. The
reported corporate tax rate after exceptional items is 28.9% (2024: 23.2%).
The reported corporate tax rate after exceptional items was lower in the prior
year due to a higher prior year over-provisions credit.
Croda operates in many tax jurisdictions other than the UK, both as a
manufacturer and distributor and it is the exposure to these different tax
rates that makes it difficult to forecast the Group's future tax rate with any
certainty given the unpredictable nature of exchange rates, individual
economies and tax legislators. The Group's non-UK profits are taxed at an
average rate that is lower than the UK statutory tax rate of 25%.
Croda's effective corporate tax rate has increased as a result of incurring
non-deductible expenditure. Otherwise, there are no significant adjustments
between the Group's expected and reported tax charge based on its reported
accounting profit. Given the global nature of the Group, and the number of
associated cross-border transactions between connected parties, we are exposed
to potential adjustments to the price charged for those transactions by tax
authorities. However, the Group carries appropriate provisions relating to the
level of risk.
5. Earnings per share
2025 2024
pence
pence
Adjusted earnings per share 146.2 142.6
Impact of exceptional items, amortisation of intangible assets arising on (101.8) (29.1)
acquisition and the tax thereon
Basic earnings per share 44.4 113.5
6. Dividends paid
Pence per 2025 Pence per 2024
share
£m
share
£m
Ordinary
Interim
2024 interim, paid October 2024 - - 47.0 65.6
2025 interim, paid October 2025 48.0 67.0 - -
Final
2023 final, paid May 2024 - - 62.0 86.6
2024 final, paid May 2025 63.0 87.9 - -
111.0 154.9 109.0 152.2
The Directors are recommending a final dividend of 63p per share amounting to
a total of £87.9m in respect of the financial year ended 31 December 2025.
Subject to shareholder approval, the dividend will be paid on 27 May 2026 to
shareholders registered on 10 April 2026. The total proposed dividend for the
year ended 31 December 2025 will be 111p per share amounting to £154.9m.
7. Intangible assets
2025 2024
£m
£m
Opening net book amount 1,310.6 1,408.5
Exchange differences 22.6 (61.3)
Additions 2.2 3.4
Disposals and write offs - (0.1)
Reclassifications from property, plant and equipment 1.2 2.4
Amortisation charge for the year (41.5) (42.3)
Impairments (10.9) -
Closing net book amount 1,284.2 1,310.6
Intangible asset amortisation is recorded in operating costs.
An impairment of £10.9m has been recognised relating to two acquired
technology process assets which are no longer expected to generate the
benefits originally anticipated at acquisition. Linked to the business
transformation programme, a decision has been made to stop further development
of these technology assets as it has been determined that resources can be
more effectively engaged on other development projects. The assets have been
determined to have no value in use and therefore the impairment has been
determined on a fair value less costs to sell basis with a fair value
hierarchy of Level 3 with no market observable data. The fair value less costs
to sell has been determined to be £nil on the basis the technology cannot be
sold at its current stage of development. Impairment of £7.5m is recognised
in relation to Consumer Care with the remaining £3.4m related to Life
Sciences. The impairments were recorded in the income statement within
exceptional operating costs.
8. Property, plant and equipment
2025 2024
£m
£m
Opening net book amount 1,082.9 1,044.0
Exchange differences (33.1) (12.1)
Additions 98.0 132.1
Disposals and write offs (0.5) (1.3)
Reclassifications to intangible assets and right of use assets (1.2) (2.5)
Depreciation charge for the year (81.4) (77.3)
Impairments (78.9) -
Closing net book amount 985.8 1,082.9
During the year the Group recognised government grant funding of £9.7m (2024:
£36.8m) relating to the US cGMP scale up project and UK Pharma production
capacity expansion project. Grant income is deducted from the cost of the
associated asset within the additions line above.
Impairments of £78.9m have been recognised during the period where decisions
made resulted in the requirement for impairment:
· An impairment of £44.6m related to the Group's decision in the
year to place the lipids scale up facility on standby at Lamar, Pennsylvania
in the USA in the Life Sciences sector. A capacity review of lipid
manufacturing facilities across the Group identified that excess capacity
exists versus anticipated medium-term demand and resulted in the decision to
place the site on standby to ensure optimisation of the Group's global
footprint and to minimise costs, aligned with the principles of the wider
transformation programme. The recoverable amount of the asset has been
determined as £nil on both a fair value less costs to sell and a value in use
basis. The value in use is £nil as some costs must still be incurred to
comply with the Group's obligations in relation to the pandemic preparedness
agreement with the US Government, but the site will not generate any income
whilst in standby mode (an onerous contract provision has been recognised in
relation to these costs, further detail is included in note 3). The fair value
less costs to sell have also been determined to be £nil due to restrictions
in place linked to the contract with the US Government for the next 10 years.
The fair value hierarchy of the valuation has been determined to be Level 3 as
observable market data is not available.
· Impairments of £28.7m related to several assets under
construction following a detailed examination of the Group's capital
expenditure spend. The review resulted in the decision in the period to stop
or amend the planned scale of specific projects as they have been assessed to
no longer represent the most effective investment of resources in the current
market environment. The impairments have all been recognised on the basis of
fair value less costs to sell of £nil as it is not possible to sell the
assets in their current stage of development because they are specific to the
Group, are incomplete or are part of a wider production site and therefore
cannot be separated. The fair value hierarchy has therefore been determined to
be Level 3 as observable market data is not available. The value in use of
these assets has also been determined to be £nil. These impairment losses
relate to the Consumer Care, Life Sciences and Industrial Specialties market
sectors.
· 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 and cease operations at a
leased warehouse located in the UK, resulting in the partial impairment of the
related property, plant and equipment and right of use asset. The impairment
has been determined on a value in use basis with a recoverable amount of
£6.7m (against both property, plant and equipment and right of use assets)
and utilised a discount rate of 9.8%. The impairment loss relates to a shared
asset and therefore the charge has been recognised in each of the Group's
market sectors.
These impairments were recorded in the income statement within exceptional
operating costs. The impairment recognised at Lamar could reverse in the
future if profitable manufacturing commences at the site. However, currently
the Group does not consider there a reasonable scenario where that could
occur.
Under the Group's business transformation programme, a number of other
capacity optimisation projects are being considered where decisions could be
made in the future that may indicate a change in the planned use of certain
assets to optimise our manufacturing footprint. Management will continue to
assess this position on an ongoing basis but have concluded that indicators of
impairment do not currently exist in relation to these assets.
9. 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 in both the current and prior year are as follows:
Post-retirement benefits
The Group's principal retirement benefit schemes are of the defined benefit
type. Year end 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
£m
£m
Opening net retirement benefit surplus 104.3 86.7
Current service cost (8.4) (10.1)
Past service cost 3.9 -
Net interest income 6.2 4.4
Employer contributions 5.1 7.1
Benefits paid 0.4 0.2
Remeasurements 2.5 15.5
Exchange differences on overseas schemes 0.3 0.5
Closing net retirement benefit surplus 114.3 104.3
Total market value of assets 888.0 897.6
Present value of scheme liabilities (763.0) (781.4)
Net pension plan asset 125.0 116.2
Post-employment medical benefits (10.7) (11.9)
Net retirement benefit surplus 114.3 104.3
Analysed in the balance sheet as:
Retirement benefit assets 137.7 130.0
Retirement benefit liabilities (23.4) (25.7)
Net retirement benefit surplus 114.3 104.3
At the end of 2025 the Scheme introduced a Pension Increase Exchange (PIE)
option, allowing eligible members the option to exchange future pension
increases that the Scheme offers for lower increases and a higher pension at
retirement. This re-design of the Scheme's retirement options represented a
plan amendment and resulted in a past service cost, recognised in the Income
Statement as a credit of £3.9m.
The sensitivity of the defined benefit obligation to changes in the
significant assumptions is as follows:
Impact on retirement benefit obligation
Sensitivity Of increase Of decrease
Discount rate 0.5% 5.7% 6.2%
Inflation rate 0.5% 3.9% 3.9%
Mortality (assumes a one-year change in life expectancy) 1 year 3.9% 4.0%
The above sensitivity analyses are based on a change in an assumption while
holding all other assumptions constant. In practice, this is unlikely to
occur, and changes in some of the assumptions may be correlated. When
calculating the sensitivity of the defined benefit obligation to significant
actuarial assumptions, the same method (present value of the defined benefit
obligation calculated with the projected unit credit method at the end of the
reporting year) has been applied as when calculating the retirement benefit
obligation recognised in the Group balance sheet.
The Group's accounts include other areas of estimation. While these areas 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 in both the current and
prior year are:
Goodwill impairment review of the Fragrances & Flavours CGU
The recoverable amount, and therefore level of headroom, is predominantly
dependent upon estimates used in arriving at the cash flow projections,
terminal value growth rate, and the discount rate.
10. 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 sectors 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.
These summary financial statements do not include all financial risk
management information; full disclosures will be available in the Group's
annual financial statements for the year ended 31 December 2025.
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 continent 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 Fair Book Fair
value
value
value
value
2025
2025
2024
2024
£m
£m
£m
£m
US$100m 3.75% fixed rate 10 year note (74.2) (70.8) (79.9) (71.2)
€70m 1.43% fixed rate 10 year note (61.0) (60.6) (57.9) (56.6)
£70m 2.80% fixed rate 10 year note (70.0) (69.3) (70.0) (67.2)
€50m 1.18% fixed rate 8 year note (43.6) (42.5) (41.3) (39.6)
£65m 2.46% fixed rate 8 year note (65.0) (62.6) (65.0) (60.3)
US$60m 3.70% fixed rate 10 year note (44.5) (42.9) (47.9) (44.3)
11. Related party transactions
The Group has no related party transactions, with the exception of
remuneration paid to key management and Directors.
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