Investor overview

Beauty Actives grew 6%, in constant currency, driven by a 16% increase in sales to Asia (excluding acquired ceramides) including double-digit percentage growth in China where the business has excellent relationships with L&R customers which are winning market share. Whilst peptides drove the sales growth, new product development is also focused on biotech-based ingredients and ceramides, leveraging the combined expertise of teams in France and South Korea.

Beauty Care sales were flat with a 9% increase in sales volumes offset by lower price/mix, and the margins that we make on raw materials in our sales prices were higher than the prior year. Beauty Care grew in all regions at constant currency other than Europe, with sales in North America benefiting from regained business that we lost in 2022 due to our inability to meet all of the demand for certain ingredients at the peak of restocking. Performance also benefitted from our focus on contract manufacturers as an additional route to independent brands, who we can support through our expertise in trends and formulation. We are accelerating innovation to enhance portfolio differentiation, with NPP sales growing 6% at constant currency and a significant increase in projects undertaken in close collaboration with customers to meet their precise performance requirements and specific growth opportunities. To underpin consistent plant utilisation, we are also managing sales volumes at the lower end of the Beauty Care portfolio where there is less differentiation, for example through greater flexibility in pricing for certain product/customer combinations.

F&F led the way with sales up at 18% in constant currency and the business delivering higher sales growth than competitors. This excellent performance reflects its leading position with higher-growth L&R customers. Growth was well balanced across both Fragrances and Flavours and was driven by a combination of higher sales with existing customers, market share gains and new technologies. Focus areas for innovation include micro-encapsulation with new patents filed in year, and odour-neutralising fragrances that are biodegradable. Capital continues to be allocated to this business to sustain growth, with a new R&D centre now open in Dubai, the expansion of fine fragrances at our dedicated facility in Grasse in France, and ongoing construction of a new manufacturing facility in China which will be in partnership with Beauty Actives.

Home Care grew 13% at constant currency with strong volumes and good growth in all regions driven by demand for its innovative ingredients differentiated by sustainability and strong performance claims.

Pharma sales fell by 2% excluding the impact of currency translation and £48m of CV19 lipid sales in the prior year. Following the acquisition of Solus Biotech in July 2023, there was a 1% inorganic contribution from phospholipid sales for both intravenous nutrition and as delivery systems for pharma actives. With biopharma demand improving through the year, sales of lipids for drug research and delivery systems for protein-based drugs, both strategic growth areas for Croda, continued to grow. By contrast, sales into consumer health and veterinary markets fell particularly in Europe, and Adjuvant Systems was impacted by the normalisation of CV19 demand. As a result, sales were higher in Asia and North America, important regions for drug development, but fell in EMEA and Latam, where consumer health represents a larger proportion of sales. In response to challenging conditions in consumer health markets, we are refocusing resources to drive an improvement in sales, supported by ongoing flexibility in price.

Crop Protection sales fell 16% at constant currency, comprising a 31% decline in H124 against a very strong comparator period and a 6% increase in H224 when volumes started to recover. While customer inventory levels remain mixed, demand has begun to improve in the context of stabilising in crop commodity prices. Our continued development of business with fast-growing local and regional crop protection companies delivered positive sales and volume impact despite the challenging market environment.

Seed Enhancement sales grew 1% at constant currency with the second half weighting more pronounced than usual. Adverse weather conditions and falling commodity prices earlier in the year adversely impacted field crop sales but the vegetable services business performed well, particularly in EMEA, positively impacting business mix.