Croda International reported first-half sales of £881 million, up 5% in constant currency, with adjusted operating profit rising 7% to £156 million, meeting expectations. The company said growth accelerated in the second quarter, with sales increasing 9% after 1% growth in the first quarter.
Adjusted operating margin, up from 17.2%, driven by higher volumes, positive pricing, and mix.
Transformation initiatives contributed £18 million in cost savings during the half, bringing cumulative benefits to £46 million. Sales volumes rose 1%, while price and mix added 4% to growth, with Beauty Actives a particular contributor. New and protected product sales increased 7%.
Regionally, sales rose 10% in Asia and 11% in Latin America, while EMEA increased 3%. North American sales declined 1%. Beauty Actives grew 27% in the second quarter, and ceramides sales rose 44% in the half. In Pharma, sales in Pharma Ingredients increased 7%.
The program we set out at the start of this year is delivering.
Chief executive Steve Foots said the company delivered the type of growth it seeks as an innovation-led business, with profits rising faster than sales and sales rising faster than volumes. He noted that Deciem, part of Estée Lauder, adopted Volufiline as the trade name for a product in The Ordinary range. Croda has repositioned Volufiline, a skin-plumping ingredient, for facial applications.
Croda's Fragrances & Flavours business experienced disruption related to the conflict with Iran, but the company said the overall effect was limited. Targeted price increases to recover input inflation and some early customer purchases were broadly offset by lower Fragrances & Flavours sales in the region. Crop Protection sales declined as higher input costs pressured farm incomes.
Croda declared an interim dividend of £0.48. Earnings per share rose 9% to £0.78. Free cash flow increased to £38 million from £28 million, while capital expenditure fell to £43 million. Net debt stood at £578 million, with leverage at 1.4 times EBITDA.
Croda maintained its 2026 guidance for organic sales growth of 3% to 6%, a further rise in adjusted operating margin and unchanged adjusted operating profit expectations. The company expects working capital to reduce relatively in the second half and reiterated its objective to generate around £50 million of structural working-capital savings by 2028. Management expects continued strong Consumer Care growth in the second half, along with improvement in Life Sciences, helped by Pharma Solutions and a modest recovery in Crop Protection.
Croda opened two sites during the half: a multipurpose facility in Dahej, India, and a combined Fragrances and Beauty Actives facility in Guangzhou, China. The company, founded in 1925, employs more than 6,000 people and is committed to be Climate, Land and People positive by 2030.