Croda International LON: CRDA reported first-quarter 2026 sales growth broadly in line with expectations and reiterated its full-year outlook, with management saying the Middle East conflict had no material impact on Q1 results despite increasing input cost pressures.
Q1 sales performance and guidance unchanged
Group Chief Executive Steve Foots said first-quarter sales rose 1% at constant currency, comparing against what he described as “a very strong quarter last year.” Foots added that Croda is not changing its guidance for full-year 2026.
“While we acknowledge the heightened uncertainty that the Middle East conflict has caused, it had no material effect on quarter one,” Foots said.
Business and regional trends
Foots broke down performance by business line, highlighting growth in Consumer Care and declines in Life Sciences and Industrial.
- Consumer Care: Sales increased 4%, driven by Beauty Actives and Flavors & Fragrances (F&F).
- Life Sciences: Sales decreased 3%, which Foots attributed largely to Crop Protection being down 8% versus a strong prior-year quarter that included significant restocking.
- Industrial: Sales declined 2% against a strong comparable period.
Regionally, Foots said growth was strongest in Latin America, supported by “robust demand in agriculture and Consumer Care.” EMEA and Asia were “as we expected,” while North America was weaker. He attributed North America’s performance to crop “normalizing as expected,” alongside continued pressure on lower-income consumers and poor weather.
Middle East exposure, pricing actions, and order book commentary
On the Middle East conflict, Foots characterized the region as small for Croda, representing around 5% of group sales, mostly in F&F. He said Croda saw “no material impact on sales in the quarter,” but noted higher input costs and said the company is raising prices to “fully recover input cost and inflation.”
In response to questions on pricing strategy, Foots emphasized Croda’s “agile pricing model” and said the company is taking a targeted approach rather than implementing blanket increases. “All cost inflation will be recovered,” he said, adding that the company is using its transformation program to segment customers and execute “case-by-case, one-to-one” price actions with no lag.
Foots said the “weight” of price increases started in April in Asia and on some products in Europe, with additional increases possible in May depending on conditions.
CFO Stephen Oxley said the order book was “good going into Q2” and that there was “absolutely no weakness whatsoever.” He later added that the order book is “slightly higher than I would have expected,” suggesting there is “probably…an element of pre-buy” as customers seek to get ahead of price increases and secure inventory. He said the company is monitoring the situation closely and that it did not affect Q1 sales.
Asked about the magnitude of price increases by region, Oxley declined to quantify, saying it could be misleading because inflation is affecting different products and regions in different ways. He also noted that around 55% of Croda’s raw material inputs are bio-based by value, with the remainder petro-based. The most significant price changes were in ethylene oxide (EO) and propylene oxide (PO), which he said represent around 10% of Croda’s raw material cost base.
Crop Protection, Beauty Care, and Pharma discussion
On Crop Protection, Foots described current dynamics as a “rebalancing of stock,” following what he called two years of boom and two years of reset. He said stock levels are broadly where they should be and that demand is “okay,” adding Croda does not see weakness in crop demand. He also addressed fertilizer prices, saying they impact farming economics, but noted crop and food prices have increased around 10%-15%, which he said partly offsets those pressures. Oxley said the Crop Protection decline was “exactly as we expected,” consistent with messaging from Tier 1 players.
On Beauty Care, Foots said weakness was “U.S. only,” driven by strong comparables, weather impacts early in the quarter, and softness among lower-income consumers. He cited extreme cold affecting Croda’s East Coast site for the first six weeks and said the quarter “started…softly but strengthening through the quarter,” with Beauty Care “starting to come back.” Oxley added Croda was also lapping “a very strong Q4 2025” as well as a strong Q1 2025.
In Pharma, Foots said Pharma Solutions was where Croda expected it to be and described the business as “lumpy,” where the timing of “one or two orders” can shift results between quarters. He said investors “don’t need to read anything into” the Q1 performance. In Pharma Ingredients, he said performance was good in all regions except Europe, and highlighted the high-purity excipient business as a key growth driver that is “doing very well,” after starting weakly and improving in March. Foots said he expects both Pharma businesses to improve over the next two or three quarters, helped by easier comparables.
Transformation, cash, and capacity/utilization themes
Oxley said profitability in Q1 was “exactly as expected,” though the company does not disclose quarterly profit at the Q1 sales update stage. He said the transformation program remains on track and targets are unchanged.
On cash flow, Oxley said performance was “exactly on track,” pointing to a year-end working capital savings target of GBP 50 million and stating it was “good to see some of the fruit…coming through.”
Asked about utilization, Oxley pointed to progress exiting 2025 at around 93% of 2019 volumes, noting that volume growth slowed last year and that trend continued into Q1. He also said the price/mix tailwind continued to diminish, having become “quite small” by the fourth quarter of 2025 and continuing into Q1 2026.
On seasonality, Oxley said Croda expects a roughly 50/50 sales split between the first and second halves of 2026. He added that profit is more second-half weighted, mainly reflecting transformation benefits accumulating through the year.
Looking ahead, Foots said Croda expects volume growth to continue through the year and is “not expecting volume reduction,” adding that customers’ priority is “delivery, consistency and continuity of supply” amid inflation moving through the value chains Croda serves.
Foots closed by reiterating that Q1 sales were in line with expectations, full-year 2026 guidance is unchanged, and the company remains confident in its three-year framework combining “innovation-led growth” and a transformation program that is “firmly on track.”
About Croda International LON: CRDA
Founded in 1925 with the aim of turning bio-based raw materials into innovative ingredients, Croda International is a speciality chemicals company focused on consumer care and life sciences markets. The company is focused on creating, making and selling innovative ingredients that deliver real benefits to a diverse range of customers and employs more than 6,000 people around the world. Sustainability is a core part of the Groups strategy with a commitment to be Climate, Land and People positive by 2030.
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