Croda International Plc

In constant currency, sales rose 5% to GBP 881 million, adjusted operating profit rose 7% to GBP 156 million, and EPS grew 9% to 78p. Gross profit was not stated, but adjusted operating margin increased from 17.2% to 17.7%, a 50 bps improvement. Free cash flow improved to GBP 38 million from GBP 28 million last year; EBITDA was GBP 208 million, net debt was GBP 578 million, and leverage was 1.4x EBITDA. By segment, Consumer Care sales grew 8% and Pharma Ingredients grew 7%; regionally, Asia grew 10%, Latin America 11%, EMEA 3%, and North America was down 1%. For the full year, management reiterated organic sales growth of 3% to 6% and a further increase in adjusted operating margin, with adjusted operating profit expectations unchanged.

Steve Foots emphasized that Croda is seeing the kind of mix it wants: profits growing ahead of sales and sales ahead of volume. He said the company is benefiting from a refocused innovation model, stronger customer co-creation, and a transformation program that is improving both growth and efficiency. His tone was confident and constructive, stressing that much of the plan is within Croda’s control and that the business is on track for the 2028 framework.

Stephen Oxley highlighted a solid first half with 5% constant-currency sales growth, 7% growth in new and protected products, 7% adjusted operating profit growth, and 9% EPS growth. He said transformation delivered GBP 18 million of additional cost savings, bringing cumulative benefits to GBP 46 million, and noted that margin expansion was supported by higher volumes and price/mix. On cash, he pointed to GBP 38 million of free cash flow, GBP 68 million of working capital outflow, GBP 43 million of CapEx, and net debt of GBP 578 million with conservative leverage at 1.4x EBITDA; he also said working capital savings of around GBP 50 million are targeted by 2028 to offset the typical annual outflow of GBP 20 million to GBP 30 million.

Analysts focused on the second-half growth profile, free cash flow, pricing versus input inflation, margin progression, U.S. share recovery, Pharma Solutions phasing, and the Croda On platform. Management said Consumer Care should keep growing strongly, Life Sciences should improve, and Pharma Solutions should recover in H2 as project revenues come through, while cash flow should improve as working capital moderates in the second half. On pricing and costs, they said price increases were targeted mainly at petrochemicals and that raw material inflation looked modest absent Middle East disruption. They also said Croda On should reduce cost to serve as more small orders move online.