Croda International (CRDA) H2 2025 earnings summary

Executive summary

• Sales grew 7% in constant currency to £1.7bn in 2025, with patented ingredient sales up 9% and innovation demand at its highest since before the pandemic.

• Adjusted operating profit rose 8% to £295m, and adjusted PBT also increased 8%; free cash flow improved to £162m, aided by lower CapEx and working capital.

• Net Promoter Scores rose by 11 points, reflecting improved service, collaboration, and trust.

• Transformation initiatives delivered £28m gross benefits in 2025 at a cost of £26m, driving efficiency and margin recovery.

Financial highlights

• EBITDA increased 5% to £397m; net debt reduced to £524m, with leverage at 1.3x EBITDA.

• Final dividend proposed at £0.63, full-year dividend at £1.11, a slight increase year-over-year.

• CapEx reduced to £108m, below guidance, supporting stronger free cash flow; maintained at ~6% of sales.

• Second-half operating margin reached 17.6%, up from 17.2% at the start of the year; adjusted operating margin for 2025 was 17.4%.

• Adjusted EPS was 146p, up 3%; ROIC improved to 8.2%.

Outlook and guidance

• Adjusted operating profit expected in line with market expectations; organic sales growth guidance of 3%-6% and further margin improvement.

• First quarter sales expected to be flat year-over-year due to a strong prior-year comparator.

• Targeting group organic sales growth of 3%-6% annually through 2028, with operating margin above 20%, free cash flow conversion over 12%, and ROIC above 10%.