ii view: Croda maintains outlook after avoiding Middle East hit
Shares in this FTSE 100 company have more than halved over the last five years. Buy, sell, or hold?
22nd April 2026 15:42
by Keith Bowman from interactive investor
First-quarter trading update to 31 March
- Revenues down 2% to £431 million
- Currency adjusted revenues up 1%
Guidance:
- Continues to expect full year organic revenue growth of 3-6%
- Continues to expect a further increase in adjusted profit margin
- Continuing to target adjusted operating profit margin above 20% by end of FY 2028
ii round-up:
Croda International (LSE:CRDA) today detailed sales in line with management’s expectations, with the maker of speciality chemicals claiming no impact from the Iran war and unchanged full-year forecasts.
Growth in Beauty Actives and Fragrances and Flavours (F&F) were offset somewhat by lower sales at the Crop Protection business, leaving first-quarter currency adjusted sales up 1% at £431 million.
Shares in the FTSE 100 company rose 1% in UK trading having come into this latest news up by just over a tenth so far in 2026. That’s similar to US oil product maker WD-40 Co (NASDAQ:WDFC) and ahead of a near 6% gain for the FTSE 100 index year-to-date.
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Croda operates across the three divisions of consumer care, life sciences and industrial specialities, making chemical ingredients for items ranging from beauty creams to medical drugs and solutions to treat water.
Currency adjusted consumer care sales, including Beauty Actives and F&F, rose 4% to £255 million during the quarter, driven by renewed customer appetite for innovation.
Life sciences sales on the same basis fell 3% to £126 million, impacted by a tough comparative for crop protection products. Industrial Speciality sales retreated 2% to £50 million.
Geographically, 11% sales growth in Latin America compared with a 7% fall in North America, with each influenced by contrasting demand for agricultural products.
Croda continues to expect annual organic revenue growth of 3-6%, with a further targeted increase in adjusted profit margin being pushed by an ongoing performance improvement programme.
First-half results are scheduled for 28 July.
ii view:
Headquartered in Snaith, Yorkshire, Croda employs around 6,000 people. Uses for its chemicals range from ingredients for home care products to help make medical drugs and assisting with seed growth and enhancement. Management improvements are focused on optimising its customer and product portfolios, improving the supply chain, as well as simplifying the company.
Geographically, the combined Europe, Middle East, and Africa (EMEA) region accounted for most sales during 2025 at 40%. That was followed by Asia at 25%, North America 24%, and Latin America the balance of 11%.
For investors, a war in the Middle East could eventually hinder EMEA related sales, with soaring energy prices also potentially adding to group costs going forward. US tariffs and Croda’s previously proposed customer surcharge to export to the country now offer headwinds. The positive impact of the pandemic and ingredient sales for Pfizer’s Covid vaccine has made for tough after-year comparatives, while the cost of group investments were previously flagged as offering headwinds.
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To the upside, Croda’s focus on product innovation and reducing costs were previously underlined within new financial targets out to 2028, including expanding adjusted profit margin to over 20% from 17.4% in 2025. Diversity in both business type and geographical region exist. An estimated net asset value comfortably below the three-year average may suggest improved value, while net debt of £524 million compared to stock market value of £4.2 billion suggests a robust balance sheet.
For now, and despite ongoing risks, more than 20 consecutive years of dividend growth and a prospective dividend yield of around 3.7% are likely to keep investors interested in this recovery play.
Positives:
- A diverse product and customer base
- A progressive dividend policy
Negatives:
- Uncertain economic outlook
- Subject to currency movements
The average rating of stock market analysts:
Buy
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