Speciality chemicals major Croda International has reported encouraging early momentum in its turnaround plan, delivering higher adjusted profits, expanding margins and increasing its dividend — even as statutory earnings were hit by more than £100m in impairment charges.
The specialty ingredients group posted full-year sales of £1.7bn, up 6.6% at constant currency, with adjusted operating profit rising 7.9% to £295.3m. Adjusted profit before tax climbed 8.4% to £276.2m, while adjusted operating margins edged up to 17.4%.
However, IFRS operating profit more than halved to £110.1m, reflecting £107.3m in impairment charges, including £44.6m related to optimising lipids capacity, alongside a £15.9m onerous contract provision.
Despite the statutory drop, Croda increased its full-year dividend to 111p, up from 110p, and reduced net debt to £523.8m, bringing leverage down to 1.3x.
Performance was led by Consumer Care and Life Sciences, both delivering 8% sales growth.
Within consumer care, fragrances & flavours surged 15%. Beauty actives rose 6%. Life Sciences also impressed as crop protection jumped 14%, seed enhancement grew 8% and pharma advanced 4%.
Industrial Specialties declined 2%, but fourth-quarter group sales returned to growth, up 5%. Adjusted EBITDA increased to £396.6m, with margins holding firm at 23.3%.
Chief Executive Steve Foots said the group’s strategy is beginning to deliver tangible results.
“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.
Croda said it delivered £28m in gross benefits from its transformation programme in 2025, ahead of its £25m target, as part of a plan to generate around £100m in annualised benefits by FY28.
The company is also targeting a £50m working capital reduction by FY28, while signalling that its period of heightened investment has ended.
For 2026, the group expects organic sales growth within its 3–6% target range, with adjusted operating profit in line with current market expectations at constant currency.
While foreign exchange headwinds could trim around £8m from reported operating profit if January 2026 rates persist, Croda says profitability will continue to improve — driven by Consumer Care, Life Sciences and the ongoing transformation programme.
