Croda International reports 8% Q1 2025 sales growth, reaffirms FY guidance

Croda International Plc has reported an encouraging start to financial year 2025, with group sales climbing to £442 million in the first quarter—marking an 8% rise from the same period last year and a 9% increase at constant currency. The chemical ingredients manufacturer highlighted consistent sales growth across all its core divisions—Consumer Care, Life Sciences, and Industrial Specialties—as it continues to implement its five-pronged strategic plan aimed at boosting volumes and recovering margins.

How did Croda perform across business segments in Q1 2025?

The company’s Consumer Care division led the pack in terms of revenue contribution, generating £255 million in Q1, up 8% year-on-year. This growth was fuelled by strong demand from regional clients and improved volume sales across categories. Notably, the Fragrances and Flavours sub-segment saw a 19% year-on-year increase, while Beauty Care and Home Care rose 5% each. Beauty Actives slipped slightly by 2% versus a strong comparator but showed sequential improvement over Q4 2024, signalling a potential turnaround.

Life Sciences delivered a robust performance as well, posting a 10% rise in sales to £134 million, underpinned by 18% growth in Crop Protection and 15% in Seed Enhancement. Pharmaceutical sales also improved, aided by strategic investments in biopharmaceutical segments, which helped offset lingering weakness in consumer health and veterinary markets.

Industrial Specialties, though the smallest contributor, still managed a 6% gain in reported sales, reaching £53 million, with volume recovery being the primary driver.

What regional dynamics supported Croda’s top-line performance?

Croda’s geographic footprint continues to provide diversified growth levers. Sales in the Europe, Middle East and Africa (EMEA) region surged by 11%, or 13% at constant currency—making it the standout contributor among global markets. Asia followed with 8% growth (9% constant currency), bolstered by rising demand across the Consumer Care and Life Sciences sectors. Latin America delivered a 6% increase, while North America trailed slightly at 4%.

Management emphasised that its decentralised manufacturing and procurement model, which ensures supply chain resilience and tariff mitigation, was critical in maintaining growth despite the emergence of global economic uncertainties and new trade barriers.

What is Croda’s five-point plan for growth and profitability?

Croda reaffirmed its commitment to a multi-year transformation strategy centred around two core objectives: expanding top-line revenue and restoring operating margins. The plan includes leveraging proximity to customers to boost sales, accelerating the commercialisation of innovations, and extracting value from recent capital investments. On the profitability front, the focus remains on increasing plant utilisation rates and realigning the cost base through a targeted £25 million savings initiative set for delivery this year.

The improvement in asset utilisation across Croda’s 11 manufacturing hubs during Q1 is seen as a key enabler of future earnings growth. Furthermore, the company has identified additional operational efficiency opportunities as part of its broader structural reset.

How is Croda addressing the impact of tariffs and geopolitical tensions?

In light of increased tariffs and growing geopolitical friction, Croda has begun evaluating the potential impact on its cost base. While its localised supply chain strategy reduces direct exposure, management acknowledged that some price pressure is inevitable. To counterbalance these rising costs, the company plans to implement a tariff surcharge where appropriate, and is actively engaging with customers to navigate these changes collaboratively.

Although the macroeconomic outlook remains volatile, Croda has maintained its full-year profit guidance. For 2025, the company expects to report adjusted profit before tax in the range of £265 million to £295 million at constant currency, in line with previous projections.

How did Croda’s stock and investor sentiment respond to Q1 results?

Following the Q1 announcement on 23 April 2025, Croda’s stock surged by 10.7% on the London Stock Exchange, marking its strongest single-day performance in recent quarters. This rally reflected investor optimism in the company’s ability to sustain growth and navigate global headwinds. The positive momentum placed Croda among the day’s top-performing FTSE 100 constituents.

Institutional sentiment also remains robust, with institutional investors collectively holding approximately 88% of Croda’s equity. This level of institutional involvement signals strong long-term confidence in the company’s strategic roadmap and revenue outlook. Analysts largely reiterated their outlook, maintaining a neutral-to-positive stance on the stock, with several suggesting Croda is well-positioned for continued recovery as pricing pressures ease and volume gains accelerate.

What do Croda’s quarterly trends suggest about its operational trajectory?

An analysis of Croda’s recent quarterly sales performance reveals a stabilising trend after a subdued fiscal 2024. Sales across all three divisions had remained relatively flat through each quarter of 2024, with group revenue fluctuating narrowly between £405 million and £409 million. The Q1 2025 jump to £442 million represents a significant acceleration and suggests that volume-led recovery is underway.

Additionally, a sequential rebound in high-margin segments such as Beauty Actives and strategic categories within biopharma indicates that Croda’s innovation pipeline is beginning to yield commercial results—one of the company’s key strategic pillars.

What should investors watch ahead of the H1 2025 results?

Despite acknowledging the unpredictability introduced by political and trade-related developments, Croda’s leadership remains confident in the business’s underlying momentum. The reaffirmation of its earnings guidance and a positive Q1 performance set the stage for a potentially stronger second half, particularly as seasonal demand typically lifts revenue in the latter part of the year.

Looking ahead, investor attention will likely turn to Croda’s half-year earnings report, scheduled for 29 July 2025. Analysts will be watching closely to assess whether the cost-saving measures and volume growth achieved in Q1 can be sustained or improved upon, particularly in the face of possible pricing headwinds from input costs and tariffs.

The company’s Annual General Meeting, also taking place on the same day as this Q1 update, is expected to provide further clarity on how management plans to navigate near-term risks while capitalising on its innovation-led product portfolio.