Our business model
We use our smart science to create high performance ingredients and technologies that improve people’s lives. We are a B2B company that, through direct local relationships, sells small quantities of high-value ingredients to customers of all sizes. These ingredients deliver vital functionality and downstream benefits at low inclusion levels.
We operate globally with a focus on high-value niches in consumer care and life science markets, working closely with customers at every stage of the value chain. We aim to enhance our reputation for innovation, sustainability and quality in everything that we do.
Value creation from discovery to supply
Croda sits at the intersection of bio-based raw materials and high-performing innovative ingredients. Through the application of our intellectual property and technology platforms, we transform basic feedstocks into ingredients that enable customers to maximise their impact with minimum footprints.
Raw materials
Raw material costs constitute approximately 35% of our sales. Our raw materials primarily comprise bio-based (rather than petrochemical-derived) resources, including grown commodities and natural oils.
Research and development
In 2023 we allocated £62m to in-house innovation. This investment is supplemented by a robust pipeline of technology acquisitions and over 500 open innovation partnerships. These collaborations with universities, SMEs and leading scientists enhance our R&D capabilities and provide access to specialised expertise and facilities.
Employees
We commercialise and develop the skills and knowledge of our people to drive a high return on sales. The employee base is expanding globally, with notable growth in science-based roles and increasing workforce diversity.
Sites, assets & infrastructure
We invest 6-8% of sales in capital expenditure annually to maintain, develop, and decarbonise our sites and infrastructure. Targeted organic investments are being made to scale up our pharmaceutical technology platforms.
Capital
Our capital requirements are primarily met through loans and credit facilities, including a sustainable banking facility, with no significant debt maturing before 2026. Our leverage is at the lower end of our targeted range of 1-2x over the medium-term cycle.
Supply chain and logistics
A global network of local warehouses ensures efficient delivery of ingredients to customers worldwide, despite recent global supply chain challenges.
Energy
Energy costs represent approximately 3% of our sales. Our efficient use of energy, sourced from diverse internal and external sources, minimises its proportion in our cost structure. Renewable energy was 37% of total energy use in 2023.
Regulations
Operating globally, we adhere to relevant regulations governing our product ingredients and applications, with regulatory change often driving requirements for our innovation.
Our Commitment
Croda is committed to being Climate, Land, and People Positive by 2030, integrating sustainability into its core practices to positively impact the environment and society for a healthier planet and future generations.
Our Markets
'One Croda' culture
United by our strong sense of Purpose and our values, we work as one team. We strive to be more agile and entrepreneurial than our competitors, with a decentralised operating model that ensures decisions are made ‘close to customers’.
Customer intimacy
We employ our own local, science-focused sales force who understand our customers. This direct selling model builds relationships with customers and provides us with insights about their challenges that are key to how we innovate. We complement direct selling with local innovation centres where we co-formulate with customers to accelerate their time-to-market. This intimacy coupled with innovation enables us to anticipate future, particularly more disruptive market changes, such as the demand for sustainable ingredients and solutions from novel technologies.
Innovation leadership
We are the leading innovator in our markets with a technology portfolio differentiated by protected intellectual property and know-how, including over 1,600 patents across more than 275 patent families. This means our ingredients have unique attributes and deliver higher value to our customers. We have a collaborative, open innovation model which combines internal R&D with partnering and technology acquisitions.
Sustainability leadership
With a heritage of using natural raw materials and providing sustainable solutions, we have embedded a long-term sustainability strategy in the way we work to ensure we deliver on our Commitment to be the world’s most sustainable supplier of innovative ingredients by 2030. With consumers and other end-customers keen to make a positive impact through their purchasing decisions, the creation of sustainable ingredients and offering sustainability claims through the use of our products are key drivers of our future commercial success.
Our approach to growth
Our growth strategy is focused on pioneering new market and technology niches where our leadership in innovation and sustainability differentiate us. We operate flexible, capital-light manufacturing sites, rather than large continuous operation plans, producing ingredients in test tube quantities rather than tanker loads. Our principal focus is on driving the continued differentiation of our portfolio through innovation and sustainability. We have a broad base of customers, large and small, and a high number of customer/ product combinations which reduces our exposure to any specific customer, market or geography.
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Our investment case
Croda is a successful global company with operations in 37 countries, selling into the three core markets of Consumer Care, Life Sciences and Performance Technologies.
Ethics
Through Our Purpose, we have set out to create a positive difference to the environment and to society.