Croda International (LON:CRDA) reported 2025 results showing higher sales, improved profits, and early progress from its transformation program, while outlining a three-year financial framework aimed at lifting margins and cash generation by 2028.
2025 results: growth despite uncertainty
Management said the company delivered a “good” performance in an uncertain environment, with sales up 7% in constant currency to £1.7 billion. Patented ingredient sales increased 9%, and the company said demand for innovation was at its highest level since before the pandemic. Croda also highlighted an 11-point improvement in Net Promoter Scores, citing better service, collaboration, and customer trust.
Segment and regional performance
In the fourth quarter, sales increased 5% in constant currency, which management said was “slightly stronger” than expected. Consumer Care rose 9%, led by another strong quarter in Flavors and Fragrances and supported by higher growth in Beauty Actives. Life Sciences increased 8%, including Pharma’s strongest quarter of the year driven by higher excipient sales. Crop protection sales were up 12% in the quarter, though the company expects that growth to slow in 2026. Industrial Specialties fell 19% against a strong prior-year comparator.
For the full year, Consumer Care sales increased 8%, with Flavors and Fragrances up 15%. Beauty Actives grew 6% and Beauty Care increased 4%. Life Sciences rose 8%, with crop protection up 14% as demand returned after destocking. Seed enhancement increased 8%, while Pharma grew 4%, which management said was below expectations due to U.S. policy impacts on vaccine adjuvant sales. Industrial Specialties declined 2%, as direct sales growth largely offset a decline with Cargill; the company said Cargill now represents 20% of Industrial Specialties sales.
Regionally, Croda reported growth across all areas, led by EMEA with sales up 9%. Asia lagged other regions as customer exports in pharma and industrial markets were impacted by U.S. tariffs. North America improved in the second half, supported by a recovery in beauty.
Margins, transformation savings, and exceptional items
Croda’s operating margin increased from 17.2% to 17.4% over the year, with second-half operating margin at 17.6%. Management said sales growth contributed 0.7 percentage points to margin, while transformation cost savings provided a 1.6 percentage point benefit, more than offsetting inflation and costs from recent investments coming online. A foreign exchange headwind of “almost 1%” masked some of the recovery.
Reported profit before tax was £91 million, reflecting £150 million of exceptional charges and amortization of acquired intangibles. Management detailed several non-cash items, including:
- £45 million full impairment of the Lamar, U.S. lipid site, plus a £16 million onerous contract provision for standby costs
- £29 million write-off for assets under construction following a review of future investment requirements
- £22 million impairment tied to the closure of a U.K. distribution center as the company optimizes its European supply chain
- £11 million impairment of acquired technology intangible assets where certain development programs were discontinued
On Lamar, management emphasized the site has been placed in standby, not “mothballed,” and said the provision covers ongoing standby costs with “no remaining financial exposure.” Croda said it has adequate lipid capacity across three sites to satisfy medium-term demand, and would restart Lamar if a “volume requirement” emerges, including from “breakout growth” projects.
Strategy updates and financial framework through 2028
Management said its plan combines growth actions with transformation initiatives, centered on refocusing innovation, improving customer experience, and increasing returns from investments. The company described a more rigorous innovation framework and highlighted examples including KeraBio, new benefits from existing ingredients (including lipids for pharmaceutical generics), and increased customer co-creation activity (with average pipeline value per co-creation project up 12% in 2025).
Croda also said it is internationalizing capabilities in Beauty Actives beyond Paris, including replicating claims testing and formulation support in key locations across Asia. In Pharma, the business has been split into two focus areas: Pharma Ingredients (over two-thirds of Pharma sales) and Pharma Solutions (lipid technologies and vaccine adjuvants, under one-third). Management said it is excluding “breakout growth” projects from its three-year plan due to uncertainty on timing, while remaining excited about long-term opportunities.
On transformation, Croda is targeting £100 million of total annualized savings and a £50 million working capital reduction by full-year 2028. It delivered £28 million of savings in 2025, slightly ahead of plan, and reduced headcount by about 5% in 2025 (excluding Flavors and Fragrances). The company is also rationalizing a portfolio of more than 100,000 SKUs, setting minimum order values for smaller customers, and accelerating adoption of its digital portal to lower cost-to-serve.
For its 2028 framework, management guided to average group organic sales growth of 3% to 6%, with Consumer Care at 3% to 6% and Life Sciences at 4% to 7%. Industrial Specialties is expected to be broadly flat, with modest direct growth offset by reductions with Cargill. The company is targeting adjusted operating margin to rise from 17.4% in 2025 to more than 20% by 2028, and free cash flow conversion of more than 12% of sales in 2028, including transformation cash costs. Management said the remaining transformation benefits are expected to total £75 million through 2028, with growth contributing “slightly” more than transformation to margin recovery.
For 2026, Croda guided to adjusted operating profit in line with current market expectations, with organic sales growth of 3% to 6% and a further increase in operating margin. First-quarter sales are expected to be similar to the prior-year quarter, which management noted was a strong comparator with 9% growth, and the company expects sales to split roughly 50/50 between the first and second halves.
About Croda International (LON:CRDA)
Founded in 1925 with the aim of turning bio-based raw materials into innovative ingredients, Croda International is a speciality chemicals company focused on consumer care and life sciences markets. The company is focused on creating, making and selling innovative ingredients that deliver real benefits to a diverse range of customers and employs more than 6,000 people around the world. Sustainability is a core part of the Groups strategy with a commitment to be Climate, Land and People positive by 2030.
