Croda International Plc

In constant currency, sales increased 5% to GBP 881 million, adjusted operating profit increased 7% to GBP 156 million, and EPS increased 9% to 78p. Free cash flow was GBP 38 million versus GBP 28 million last year, gross margin/operating margin increased from 17.2% to 17.7%, net debt was GBP 578 million, and leverage was 1.4x EBITDA. For the first half, Consumer Care sales grew 8% and Pharma Ingredients grew 7%; by region, Asia was up 10%, Latin America up 11%, EMEA up 3%, and North America down 1%. Management reaffirmed full-year 2026 guidance for organic sales growth of 3% to 6%, a further increase in adjusted operating margin, and unchanged adjusted operating profit expectations; it also said the outlook for 2028 remains on track.

Steve Foots emphasized that the quarter showed Croda doing “what we expected,” with profits ahead of sales and sales ahead of volume, which he framed as the right shape for an innovation-led business. He said demand for innovation is increasing, especially among large multinationals, and that Croda’s refocused R&D and transformation program are starting to show benefits. His tone was confident but measured, repeatedly stressing that much of the progress is within the company’s control and not dependent on a broad end-market recovery.

Stephen Oxley highlighted the key financials: constant-currency sales of GBP 881 million, adjusted operating profit of GBP 156 million, EPS of 78p, free cash flow of GBP 38 million, net debt of GBP 578 million, and leverage of 1.4x EBITDA. He said margin rose from 17.2% to 17.7%, with GBP 18 million of transformation savings in H1 and GBP 46 million cumulative benefits, and noted that operating margins should increase sequentially in the second half. On cash, he pointed to working capital outflow of GBP 68 million, CapEx of GBP 43 million, and said working capital should improve in H2, with structural savings of around GBP 50 million by 2028 expected to offset typical annual growth-related outflows of GBP 20 million to GBP 30 million.

Analysts focused on the second-half trajectory, cash flow, Consumer Care pricing/mix, the pace of transformation savings, U.S. market share recovery, Pharma Solutions phasing, and whether Croda On can lower cost to serve. Management said H2 should benefit from continued strong Consumer Care growth, some improvement in Life Sciences, and sequential margin gains from both mix and transformation, while free cash flow should improve as working capital eases. On Pharma Solutions, they said the business is lumpy and project-based, but the order book supports improvement in H2; on pricing, they said increases were targeted mainly at petrochemical-linked inputs and would be reviewed again if needed.