Croda International PLC (LSE:CRDA) has been busy reshaping itself over the past five years, ploughing nearly €2 billion into acquisitions and capital spending.
Now, according to its new chief financial officer, Stephen Oxley, the priority is much simpler: restore profitability.
On a roadshow with North American investors last week, he set out his ambition to lift Croda’s operating margin, which has slumped to 17.2% in 2024 and the first half of 2025, back towards the mid-20s by the end of the decade.
UBS, which hosted the meetings, keeps a 'buy' rating on the stock with a price target of 4,500p, an almost 80% premium to the current 2,517p valuation.
The path back relies on cost savings and squeezing more out of existing operations.
A £100 million efficiency programme, expected to be fully effective by 2027, is already underway and includes a 6% reduction in headcount.
Faster progress in higher-margin businesses such as pharmaceuticals and beauty actives would help push margins closer to the top end of management’s 20–25% target range.
Investors will hear more when Croda presents its 2030 strategy in early 2026.
The plan will set out how each division contributes, alongside targets for returns and cash generation. Mr Oxley expects returns on invested capital, excluding goodwill, to recover to the mid-teens from today’s 11%.
For now, dealmaking is firmly off the table. With major expansion projects complete and debt modest at 1.5 times earnings, management intends to use rising free cash flow for shareholder returns.
Share buybacks are pencilled in for 2026, without jeopardising a steady dividend policy.
Current trading remains tough. The consumer backdrop is fragile, particularly in the US, where shoppers are trading down from high-end to mass-market beauty products, hitting Croda’s premium Beauty Actives line.
In Europe, private-label demand is also rising. Even so, Croda is cushioned to a degree by its reliance on smaller local and regional customers, which account for around three-quarters of its Consumer Care sales.
The message from the new finance chief is clear: the building is done, now comes the job of proving Croda can deliver the returns.