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Croda International PLC (GB:49GP)
LSE:49GP
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Croda International
(LSE:49GP)
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Rating:61Neutral
Price Target:
92.00p
▲(5.75% Upside)
Action:ReiteratedDate:02/25/26
The score is held back primarily by weakened reported profitability and very overextended technical momentum (RSI near 100). Offsetting factors include resilient cash generation, manageable leverage, and a constructive earnings-call outlook with clear margin and savings targets, plus a high dividend yield that supports total-return appeal.
Positive Factors
Resilient cash generation
A strong free cash flow rebound provides durable funding for capex, dividends and the GBP100m transformation programme without excessive external finance. Reliable cash conversion cushions cyclical earnings, supports deleveraging targets and enables strategic reinvestment over the next 2–6 months.
Clear medium-term financial framework
A defined 2028 plan with concrete growth, margin and savings targets gives operational clarity and accountability. If delivery persists, it should structurally improve margins, ROIC and cash conversion, aligning incentives and guiding capital allocation over the medium term.
Diversified portfolio and innovation
Growth in patented and new ingredients and fast-selling product launches reflect durable R&D and commercial capabilities. A diversified end-market mix and product differentiation support pricing power, customer stickiness and exposure to faster-growing regions over the coming months.
Negative Factors
Large exceptional charges & impairments
Material non‑cash impairments and one-offs reflect prior investment and footprint choices and have sharply reduced reported profitability. Continued optimization may prompt further charges, eroding reported earnings and capital cushions and complicating comparability of future results.
Muted organic growth and earnings volatility
Flat top-line and large swings in net income indicate underlying demand and mix weakness plus below-the-line volatility. Sustained revenue stagnation and earnings variability hinder margin sustainability, make hitting dividend and ROIC targets harder, and raise execution risk.
Balance-sheet erosion trend
Although leverage remains moderate, falling equity and higher debt in 2025 reduce financial headroom. If profitability stays pressured, the shrinking equity base could constrain M&A, capex and dividend flexibility and increase vulnerability to future earnings or cash shocks.
Croda International (49GP) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£3.97B
Dividend Yield7.59%
Average Volume (3M)173.00
Price to Earnings (P/E)60.7
Beta (1Y)0.01
Revenue GrowthN/A
EPS GrowthN/A
CountryUK
Employees6,027
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)N/A
Shares Outstanding499,000
10 Day Avg. Volume516
30 Day Avg. Volume173
Financial Highlights & Ratios
PEG Ratio-0.99
Price to Book (P/B)1.72
Price to Sales (P/S)2.21
P/FCF Ratio21.91
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Croda International Business Overview & Revenue Model
Company DescriptionCroda International Plc creates, makes, and sells specialty chemicals in Europe, the Middle East, Africa, North America, Asia, and Latin America. It operates through four segments: Consumer Care, Life Sciences, Performance Technologies, and Industrial Chemicals. The company offers adhesives; crop protection additives and adjuvants, seed enhancement and animal health chemicals, chemical bio-stimulants, and specialty additives for agricultural films; and lubricant additives, coatings and polymers, vehicle cleaning chemicals, and products for automotive textiles and fibers, as well as specialty additives for plastics, and battery and catalyst industries. It also provides specialty ingredients for self-tanning, color cosmetics, bath and shower, deodorants, anti-perspirants, depilatories, men's grooming, and oral hygiene, as well as skin, hair, sun, body, and baby care applications; construction chemicals and bitumen additives; dietary supplements; and materials and polymer additives for electronics and devices. In addition, the company offers chemistries, emulsifiers, fuel and power generation additives, and polymer additives; food additives; specialty polymer additives for furniture and wood applications; household, industrial, and institutional cleaning products; lubricants; oleochemicals; and packaging, print, and paper chemicals. Further, it provides paints and coatings; active pharmaceutical ingredients; thermal management products; plastic and rubber products; skin health products; hygiene and industrial nonwovens, botanical extracts, tissues, and textile auxiliaries; and water treatment chemicals. Additionally, the company offers bio-based phase change materials for buildings and ventilation, clothing and healthcare, electronics and devices, food and refrigeration, energy storage and recovery, temperature controlled packaging, and vehicles and automotive applications. The company was incorporated in 1925 and is headquartered in Goole, the United Kingdom.
How the Company Makes MoneyCroda International generates revenue primarily through the sale of specialty chemicals and ingredients across its diverse business sectors. The company's revenue model is built on providing high-value, customized solutions to its clients, which include major brands in the personal care and health care industries. Key revenue streams include the sale of surfactants, emulsifiers, and active ingredients, as well as performance-enhancing additives for various applications. Additionally, Croda has established significant partnerships with leading companies in its focus sectors, which not only enhance its product offerings but also ensure a steady demand for its innovative solutions. The emphasis on sustainability and innovation allows Croda to command premium pricing for its products, further contributing to its profitability.
Croda International Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Neutral
The call presented a mix of clear operational progress and structural improvement (7% revenue growth, adjusted profits +8%, improved free cash flow, margin recovery and a defined 2028 financial framework) alongside material one-off and non-cash setbacks (GBP 150m exceptional charges, impairments including the Lamar site, and some sub-segment weaknesses). Management emphasized transformation momentum, SKU and procurement rationalization, and focused growth initiatives (innovation, customer segmentation, geographic rebalancing). Given the balance of substantive underlying operational improvements and a cautious but credible plan to deliver further savings and margin expansion — tempered by significant impairments and near-term volatility in parts of Pharma and Industrial Specialties — the overall tone is constructive but appropriately cautious.Q4-2025 Updates
Positive Updates
Revenue Growth and Scale
Group sales rose 7% in constant currency to GBP 1.7bn for FY2025, with fourth-quarter sales up 5% CC. Consumer Care grew 8% for the year (Q4 +9%) and Life Sciences grew 8% (Q4 +8%).
Profitability (Adjusted)
Adjusted operating profit increased 8% to GBP 295m and adjusted profit before tax rose 8% to GBP 276m, reflecting improved underlying performance.
Free Cash Flow and Balance Sheet Improvement
Free cash flow was GBP 162m for FY2025 (strengthened in H2), CapEx reduced from GBP 138m to GBP 108m (below guidance), net debt reduced slightly to GBP 524m and leverage improved to 1.3x EBITDA (from 1.5x).
Margin Recovery and Transformation Progress
Operating margin moved from 17.2% to 17.4% for the year, with second-half margin at 17.6%. Transformation cost savings contributed c.1.6 percentage points of margin recovery and GBP 28m of savings were delivered in 2025, ahead of plan.
Strong Performance in Key Sub-segments
Fragrances & Flavors (F&F) grew 15% for the year (Flavors noted as fastest-growing with >20% in 2025 commentary); Crop Protection sales up 14% for the year (Q4 +12%); Beauty Actives +6% and Beauty Care +4%.
Innovation and Commercial Wins
Sales of patented ingredients up 9%; sales of new ingredients increased 10% in 2025. Launched KeraBio (hair repair platform) with initial batches selling out quickly; pipeline value per customer co-creation project increased 12%.
Customer Metrics and Geographic Rebalancing
Net Promoter Scores increased by 11 points; >90% customer retention over 5 years. 48% of sales now outside Europe/North America (up from 37%) and 50% of business in fast-growing countries.
Clear 2028 Financial Framework and Targets
Management targets organic sales growth of 3%–6% (group), adjusted operating margin >20% by FY2028 (EBITDA margin >25%), annualized transformation savings GBP 100m and working capital reduction GBP 50m by 2028, and free cash flow conversion >12%.
Negative Updates
Large Exceptional Charges Impacting Reported Profit
Reported profit before tax fell to GBP 91m from an adjusted PBT of GBP 276m after GBP 150m of exceptional charges in FY2025 (largely non-cash impairments and one-off items).
Lamar Lipid Site Impairment and Standby Costs
GBP 45m full impairment of the Lamar lipid site plus GBP 16m onerous contract provision for standby costs; decision not to start commercial production at Lamar and to place facility in standby pending future demand.
Other Significant Non-Cash Write-downs
Additional non-cash charges include GBP 29m write-off for assets under construction, GBP 22m impairment for closure of a UK distribution center, and GBP 11m impairment of acquired technology intangibles; management notes further impairments likely during footprint optimization.
Industrial Specialties Weakness
Industrial Specialties declined 19% in Q4 versus a strong prior-year quarter and was down 2% for the full year, with reduced volumes from Cargill (now 20% of IS sales) cited as a headwind.
Pharma Sales Below Expectations
Pharma sales grew 4% for the year, below company expectations due to U.S. policy impacts on vaccine adjuvant sales, creating volatility in the Pharma Solutions sub-segment.
Foreign Exchange and Inflation Headwinds
Foreign exchange created an almost 1% headwind that masked margin recovery; salary inflation cost GBP 12m in 2025 and a GBP 10m step-up in depreciation is expected in 2026 as recent investments come online.
Working Capital and Inventory Dynamics
Working capital saw an outflow of GBP 8m in FY2025 versus a GBP 21m inflow prior year (prior year benefited from a GBP 48m one-off COVID receivable). Management expects typical working capital outflow of GBP 20–30m to fund growth and targets structural reductions of GBP 50m by 2028.
Execution Lessons and Capital Decisions
Management acknowledged investment mis-steps (e.g., scaling two lipid facilities rather than one), leading to standby/impairment costs; further footprint optimization may trigger future non-cash charges.
Company Guidance
Guidance: management expects average organic sales growth of 3–6% to 2028 (Consumer Care 3–6%, Life Sciences 4–7%, Industrial Specialties broadly flat), with Q1 sales similar to Q1 2025 and a roughly 50/50 H1/H2 split; adjusted operating profit is expected in line with market expectations and adjusted operating margin to increase from 17.4% in 2025 to >20% by FY2028 (EBITDA margin >25%), with volume growth moderating from c.10% in 2025 and price/mix turning positive. Financial targets include GBP100m annualized transformation savings by 2028 (GBP28m delivered in 2025; c. GBP75m to go) at a cash cost of c. GBP80m, a working capital reduction of GBP50m, free cash flow conversion >12% of sales, CapEx around GBP108m (~6% of sales), net debt ~GBP524m (leverage 1.3x EBITDA; target 1–2x), ROIC >10% by 2028, and a dividend policy targeting 40–50% of adjusted earnings (FY25 dividend 111p, final 63p); FY25 actuals to note: sales GBP1.7bn (+7% cc), adjusted operating profit GBP295m (+8%), adjusted PBT GBP276m (+8%), EBITDA GBP397m (+5%), and free cash flow GBP162m.Croda International Financial Statement Overview
Summary
Financials are mixed: revenue has been broadly flat recently and reported profitability deteriorated sharply in 2025, but EBIT held up and cash generation remained solid with a strong free-cash-flow rebound. Leverage looks manageable, though equity has been trending down and debt rose in 2025, making sustained profit pressure the key risk.Income Statement
Revenue has been broadly flat over the last two years (2024 down ~3.9%, 2025 up ~1.9%), pointing to a muted growth backdrop. Profitability has weakened meaningfully versus the 2021–2023 period: net income fell to 62.0M in 2025 from 158.5M in 2024 and 171.0M in 2023, indicating margin pressure and/or higher below-the-line costs. That said, core operating profit has held up better than bottom-line results (EBIT 243.7M in 2025 vs 227.5M in 2024), suggesting the main business remains profitable but earnings quality/volatility is a watch item.56
Neutral
Balance Sheet
Leverage appears manageable for a specialty chemicals business: debt-to-equity was ~0.30 in 2023–2024, and equity remains substantial (2.19B in 2025) versus total debt (760.3M). The company has also reduced leverage versus 2020–2021 levels (debt-to-equity ~0.53–0.57 then), improving financial flexibility. A key weakness is declining equity over time (2.42B in 2022 to 2.19B in 2025) alongside rising debt in 2025, which could limit balance-sheet strength if profitability stays pressured.72
Positive
Cash Flow
Cash generation is a relative bright spot: operating cash flow remained solid in the ~290–338M range across 2023–2025, and free cash flow rebounded strongly in 2025 to 171.8M (up sharply from 137.6M in 2024). However, cash conversion has not been consistently strong—operating cash flow was below net income in 2024 (coverage ~0.95) and free cash flow declined in both 2023 and 2024 before the 2025 recovery. Overall, cash flow looks resilient, but year-to-year volatility reduces confidence.68
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.70B | 1.63B | 1.69B | 2.09B | 1.89B |
| Gross Profit | 608.70M | 733.90M | 730.00M | 864.90M | 825.60M |
| EBITDA | 380.70M | 374.50M | 388.50M | 924.80M | 549.40M |
| Net Income | 62.00M | 158.50M | 171.00M | 649.30M | 320.80M |
Balance Sheet | |||||
| Total Assets | 3.41B | 3.51B | 3.58B | 3.61B | 3.29B |
| Cash, Cash Equivalents and Short-Term Investments | 172.80M | 166.80M | 172.50M | 320.60M | 112.80M |
| Total Debt | 760.30M | 699.10M | 710.10M | 615.80M | 936.00M |
| Total Liabilities | 1.21B | 1.21B | 1.21B | 1.18B | 1.53B |
| Stockholders Equity | 2.19B | 2.28B | 2.35B | 2.42B | 1.75B |
Cash Flow | |||||
| Free Cash Flow | 171.80M | 137.60M | 156.80M | 160.90M | 190.50M |
| Operating Cash Flow | 289.50M | 319.40M | 337.50M | 313.30M | 349.20M |
| Investing Cash Flow | -109.80M | -139.10M | -409.80M | 418.10M | -218.40M |
| Financing Cash Flow | -152.60M | -182.60M | -52.40M | -550.90M | -111.90M |
Croda International Technical Analysis
Positive
87.00
Price Trends
87.00
Positive
85.88
Positive
85.07
Positive
Market Momentum
0.02
Positive
99.50
Negative
<0.01
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:49GP, the sentiment is Positive. The current price of 87 is below the 20-day moving average (MA) of 87.00, above the 50-day MA of 87.00, and above the 200-day MA of 85.07, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 99.50 is Negative, neither overbought nor oversold. The STOCH value of <0.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:49GP.
Croda International Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | £561.44M | 22.53 | 6.22% | 9.48% | 0.58% | 61.58% | |
64 Neutral | £915.04M | -9.47 | 3.37% | 1.34% | -11.78% | -92.61% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | £3.97B | 60.70 | ― | 7.59% | ― | ― | |
60 Neutral | £3.28B | -46.91 | -5.62% | 3.54% | -4.60% | -126.46% | |
60 Neutral | £126.39M | 32.05 | 8.02% | 4.08% | 1.12% | -0.70% | |
51 Neutral | £29.11M | -1.25 | -7.26% | ― | -4.41% | 2.29% |
* Basic Materials Sector Average
GB:49GP
Croda International
87.00
3.72
4.47%
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161.00
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GB:JMAT
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1,997.00
591.57
42.09%
GB:SYNT
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-86.49%
GB:TET
Treatt plc
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GB:VCT
Victrex
645.00
-226.38
-25.98%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.