REG - Croda International - Third quarter 2025 sales update

Croda InternationalAnnouncement

16/10/2025 07:00

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RNS Number : 5673D  Croda International PLC  16 October 2025

Press Release

16 October 2025

 

Third quarter 2025 sales update

Group sales up 6.5%; delivering on plan to grow earnings and improve returns

Croda International Plc ("Croda" or the "Group") today provides an update on
its sales performance in the third quarter of 2025 (the three months ended 30
September 2025).

 •    Group sales of £425m, up 6.5% at constant currency
 •    Continued growth in a more challenging environment led by Beauty Actives,
      Fragrances and Flavours (F&F) and Crop Protection
 •    Execution of our transformation plan on track
 •    FY25 outlook(1) unchanged

Group performance
                                                                 Change versus
                                prior year
                         Q325   Q324                         Change                       Constant currency change

                         £m     £m
 Consumer Care           241.6  228.1                        5.9%                         8.1%
 Life Sciences           133.8  128.8                        3.9%                         5.9%
 Industrial Specialties  49.3   49.7                         (0.8)%                       1.2%
 Group                   424.7  406.6                        4.4%                         6.5%

 

Q3 sales increased to £424.7m, up 4.4% on a reported basis versus the prior
year and up 6.5% in constant currency. As anticipated, customer demand in Q3
was similar to Q2, with sequential sales ahead in a more challenging market
environment. Sales growth was driven by an improvement in Beauty Actives,
continued double-digit sales growth in F&F and further recovery in Crop
Protection.

We have continued to optimise utilisation at our shared production sites
through targeted sales of ingredients in Beauty Care, Crop Protection and
Industrial Specialties as part of the actions we have been taking since 2024
to increase operating margins. Alongside innovation-led growth in Actives and
further strength in F&F, this resulted in another quarter of low
double-digit sales volume increases compared with the same period last year.
As a result of these actions, mix continued to be negative year-on-year due to
both product and business mix. Like-for-like prices remained largely
consistent with the prior year.

We are implementing the actions required to realise £25m of cost savings this
year and are delivering on our transformation plan to improve earnings and
returns. To grow sales we are:

1.   Maximising returns from our portfolio, following a period of peak
investment

2.   Leveraging our proximity to local and regional (L&R) customers

3.   Stepping up innovation to meet renewed demand from customers of all
sizes and to drive margin recovery we are:

4.   Optimising capacity across our production and distribution networks

5.   Realigning costs, and simplifying and modernising Croda through a
multi-year operational efficiency programme

 

The progress we are making to enhance our operational efficiency underpins our
confidence in being able to deliver annualised cost savings of £100m by end
of 2027, contributing to margin recovery.

We expect the more challenging trading environment and low order book
visibility to continue for the remainder of the year. In line with previous
years, absolute sales in Q4 are likely to be seasonally lower than in the
first three quarters as customers typically manage their working capital into
the year end. Despite this, the combination of good year-to-date sales growth
and delivery of anticipated cost savings means that our full year 2025 outlook
is unchanged. We continue to expect to deliver £265m to £295m Group adjusted
profit before tax at constant currency(1).

Foreign exchange

Constant currency(1) expectations are based on the Group's average exchange
rates through 2024. H125 adjusted operating profit was adversely impacted by
£4.8m due to currency translation and we anticipate a further adverse impact
in the second half of the year.

In addition, the Group's underlying performance is exposed to transactional
currency exposures which we seek to mitigate through currency hedging, pricing
and optimising our supply chains. H125 adjusted operating profit was adversely
impacted by £6.7m from transactional exposures and we expect a small adverse
impact in H225.

 
Regional performance
 % change in sales versus the prior year  Change  Constant currency change
 EMEA                                     8%      7%
 North America                            6%      10%
 Latin America                            7%      11%
 Asia                                     (4)%    0%
 Group                                    4%      7%

The imposition of US trade tariffs has contributed to volatility in quarterly
performance by region, adversely impacting customers' export sales in certain
regions, particularly in pharma and industrial markets in Asia, and in
agriculture markets in Latin America.

 
Business performance
 
Consumer Care
 % change in sales versus the prior year  Change  Constant currency change
 Beauty Actives                           11%     12%
 Beauty Care                              3%      5%
 F&F                                      11%     13%
 Home Care                                (6)%    (4)%
 Total Consumer Care                      6%      8%

Sales in Consumer Care were up 6% on a reported basis and 8% on a constant
currency basis. Year-on-year sales growth in Beauty Actives improved to 12% at
constant currency principally driven by stronger sales in North America. Sales
grew 5% in Beauty Care supported by deliberate action to optimise plant
utilisation in certain parts of the portfolio. F&F continued to deliver
double-digit percentage sales growth driven by strong demand for Parfex's
premium fragrances and for Flavours. Sales were lower in Home Care, the
smallest business unit in Consumer Care, due to volatility in demand in the
quarter.

Life Sciences
 % change in sales versus the prior year  Change  Constant currency change
 Pharma                                   (2)%    0%
 Crop Protection                          17%     19%
 Seed Enhancement                         (2)%    0%
 Total Life Sciences                      4%      6%

Reported sales in Life Sciences were up 4%, or by 6% at constant currency.
Pharma sales were flat at constant currency with higher sales of
pharmaceutical ingredients such as excipients (which represent most of our
portfolio), offset by lower lipid and adjuvant sales as the US regulatory
environment creates uncertainty for customers. Crop Protection sales were up
19% at constant currency driven by continued recovery in demand from larger
crop science customers following an extended period of destocking, aided by
our proactive actions. Sales were flat at constant currency in Seed
Enhancement, a business which experiences some fluctuations in quarterly
demand due to the seasonality of agriculture markets.

Industrial Specialties

Reported sales in Industrial Specialties fell by 1% and were up 1% at constant
currency.

 
Quarterly sales performance
 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
 Half yearly sales (reported) £m   Consumer  Life       Industrial    Group

                                   Care      Sciences   Specialties
 H1 2024                           468.4     246.2      101.3         815.9
 H2 2024                           451.6     258.1      102.5         812.2
 H1 2025                           491.8     261.0      103.0         855.8

 

 
Further information

Croda is hosting a conference call for analysts and investors at 8.00am BST
this morning. Please register in advance at: www.croda.com/investors
(http://www.croda.com/investors) .

Croda will report full year 2025 results on 24 February 2026.

(1)Technical foreign exchange guidance

Currency translation impact. Constant currency expectations are based on the
Group's average exchange rates through 2024 which were US$1.28 and €1.18.
The US Dollar and the Euro represent approximately 65% of the Group's currency
translation exposure. We estimate that the average annual currency translation
impact on adjusted operating profit is £1m per Dollar cent movement per annum
and £1m per Euro cent movement per annum. The impact from movements in
smaller currencies is broadly aligned with the impact from movements in the US
Dollar.

H125 adjusted operating profit was adversely impacted by £4.8m and adjusted
profit before tax was adversely impacted by £4.5m due to strengthening
Sterling. Assuming 1 July 2025 exchange rates for the remainder of the year,
we estimate translation would have a further £5m adverse impact on Group
adjusted profit before tax in the second half of the year.

Transactional currency impact. In addition, the Group's underlying performance
is exposed to transactional currency exposures which we seek to mitigate
through currency hedging, pricing and optimising our supply chains. With the
strength of Sterling, H125 adjusted operating profit was adversely impacted by
£6.7m (H124: £1.2m) from transactional exposures and we expect a £2-3m
adverse impact in H225.

For enquiries contact
 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

 

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