Chairs Statement 2025

Dear Shareholders,

Croda is a global business with a strong heritage and a clear focus on innovation. In an increasingly uncertain world, innovation differentiates businesses and drives long-term success. I am encouraged by the breadth of innovation across the Group, spanning process improvements, new product development and enhancements to existing products, underpinned by close collaboration with customers. This partnership model enables us to deliver high-value, speciality ingredients that help customers build stronger brands and address their most pressing challenges.

Performance - a year of transition and transformation

Croda today has a higher-quality, more differentiated portfolio than five years ago, serving attractive markets supported by long-term growth drivers. However, the Board is disappointed with recent performance and believes the business can deliver more. In response, during 2025 we reviewed our business and launched a growth and efficiency transformation programme, to strengthen performance, returns and sustainable growth. 

While delivery sits with the executive team, the Board is closely involved, providing oversight, challenge and guidance. The programme places customers firmly at the centre of the business, building on Croda’s core strengths of innovation, customer intimacy and a distinctive culture. We aim to deepen customer relationships and accelerate innovation through best-in-class service and more localised innovation capabilities. Alongside our strategy we are executing a transformation programme, to reduce costs by ~£100m for full year 2028, and improve the efficiency and effectiveness of our processes and operations, spreading best practice across our global business.

Innovation

Innovation remains central to Croda’s differentiation. We continue to focus on innovating at the top of our portfolio, while actively managing and, where appropriate, rationalising less differentiated products. The Board has reviewed the innovation pipeline and remains confident in its strength, supported by unrivalled claims data and solutions often tailored to individual customers. New product launches in 2025, such as Zenakine, a naturally derived neuroactive ingredient developed in partnership with a start-up, to address the effects of stress on skin, demonstrate our continued ability to deliver solutions that matter. New process innovation includes our investment at our pharma facility in Leek, which supported the launch of Super Refined™ Poloxamer 188.

The Board has established an Innovation Advisory Council to be chaired by Non-Executive Director, Keith Layden to increase the time and focus by the Board on innovation and our science and technology. The Council will comprise both internal and external experts to provide strategic insight into emerging technologies, disruptive science, and process platforms, aligning with our approach to ‘Open Innovation’ and ensuring Croda maintains its position as a world-class, innovative and differentiated business.

The Council will support the Board by undertaking deep dives into areas requiring detailed technical and strategic discussion, challenging existing assumptions and refining Croda’s innovation model to ensure alignment with evolving customer needs and market dynamics.

Sustainability

During 2025, the Board Sustainability Oversight Committee reviewed progress against our sustainability strategy and worked with management to define priorities for the remainder of the decade. Our refreshed sustainability strategy is more focused, prioritising areas that customers value most and where Croda can have the greatest impact.

An early outcome of the strategy refresh was our recommitment to science-based targets for greenhouse gas emissions, validated by the Science Based Targets initiative. The inclusion of a Scope 3 target covering land-based emissions within our supply chain reflects the Board’s focus on addressing Croda’s most material environmental impacts. We also remain committed to the Croda Foundation, our independent charity, which has delivered measurable change to over 23 million people through 59 projects across 23 countries since its founding in 2021. The Foundation concentrates on two key areas: improving livelihoods and improving access to health, with poverty alleviation the guiding aim of its work. Employee-nominated projects are a hallmark of the model and continue to embed purpose across Croda, connecting staff pride to tangible social impact outcomes.

Talent and succession

We were pleased to welcome Stephen Oxley as Chief Financial Officer on 1 April 2025. Stephen’s experience in strategy execution and performance improvement has helped shape our transformation programme. We also welcomed Thomas Riermeier as President Life Sciences, whose background in Healthcare and Pharma brings valuable external perspective, and Thiru Selvan, promoted to President of Operations, who is leading enhancements to our global supply chain.

Together, these appointments strengthen the Executive Committee which now combines fresh thinking with deep organisational knowledge. More broadly, the Board has increased its focus on talent development and succession planning, regularly reviewing leadership capability and engaging with high-potential colleagues globally to ensure robust succession for the future.

Stakeholder engagement

Engaging with our stakeholders remains a priority for the Board. The principal role of the Board is to ensure obligations to shareholders and all other stakeholders are understood and met. As well as spending time with the Executive Committee and senior leaders, I continue to invest time out of the Boardroom to meet employees, industry experts and our shareholders. In October, fund managers and corporate governance specialists representing 25% of our issued share capital joined us for lunch to discuss shareholder priorities.

Shareholders appreciated the opportunity to meet and were positive about the honesty and transparency of Croda’s engagement. They were aligned with the Board’s view that the Company’s priorities should be execution and operational delivery to grow earnings and improve returns. They were also supportive of the Board’s focus on talent management, particularly given recent Executive Committee changes. I would like to thank everyone I have met for their open engagement and continued support.

I value spending time with employees across the Group and during visits this year, was struck by the strong collaboration across teams and markets, particularly within our research and development (R&D) community. This sharing of knowledge and expertise underpins our ability to deliver consistent, high quality solutions to customers.

Despite market volatility and the structural changes driven by our transformation programme, our 2025 employee NPS was +21, with belief in and advocacy for Croda at +28. The Board remains committed to protecting and strengthening Croda’s culture and values.

During the year, I spent time with teams across our global business and at our R&D laboratories in Cowick and Daresbury in the UK. I also visited our facilities in Princeton in the US, Spain, Singapore, Korea and our seed enhancement business based in the Netherlands, and saw first-hand how our teams collaborate across sectors and markets. Strong cross-business collaboration has been a key driver in progressing the commercial success of our ceramide range. This work, led by the teams in France and South Korea, has been strengthened by outstanding collaboration across our global network, including the R&D team in China, the neuro-evaluation team in Singapore, the Princeton Haircare team, and the encapsulation teams in Cowick and Brazil. This collective, multi-market effort across multiple products and applications demonstrates our ability to leverage global expertise to accelerate innovation and deliver added value.

We also continued to bring the customer voice into the Boardroom through surveys and direct engagement. Working collaboratively with the Executive Committee, members of our Board met with key customers. This provides us with a unique opportunity to hear from customers directly. In the Beauty area specifically, meetings with customers have helped inform on trends and dynamics in this fast-moving sector which have helped to drive innovation and ensure that our customers remain at the forefront. Such insights help us to understand business trends and dynamics and to work with the Executive Committee to identify opportunities and priorities by sector and by region. Feedback from customers, alongside improved Net Promoter Scores has reinforced Croda’s position as a trusted partner and gives the Board confidence in the Group’s longterm prospects.

Board composition and dividend

In July 2025, Julie Kim retired from the Board following her appointment as Group CEO of Takeda Pharmaceutical. We thank Julie for her valuable contribution and wish her every success. In January 2026, Jill Anderson joined the Board, bringing more than 30 years of international leadership experience in the health care sector, most recently at GSK, across finance, commercial, research and supply chain roles.

Our Directors’ Remuneration Policy was last approved by shareholders at the 2023 Annual General Meeting (AGM) and will therefore require re-approval at the 2026 AGM. In advance of this, the Committee has reviewed the Directors’ Remuneration Policy to ensure that it continues to appropriately support the achievement of the Group’s strategic objectives.

The Board recognises the importance of shareholder returns and a final dividend of 63.0p has been proposed, resulting in a full-year dividend of 111.0p. This represents a payout ratio of 76%, above our target range of 40-50%, however with a strong balance sheet and confidence in the longer-term outlook, the Board remains committed to at least maintaining the dividend. This is in line with our capital allocation policy, detailed on page 23 of the Annual Report, which aims to provide regular returns to investors.

Looking ahead

As Croda enters its second century, we do so with confidence, underpinned by innovation and a shared sense of purpose. Our success over the past 100 years has been driven by our ability to anticipate change and respond through science-led innovation, guided by the expertise and commitment of our teams. As a knowledge-based business, our people are critical to the future success of the Company, and I’d like to thank our teams around the world for their ongoing commitment to Croda and our customers.

While external conditions remain uncertain, Croda’s transformation is underway. The Board believes the actions being taken will strengthen the Group’s ability to deliver sustainable growth and improved returns over the medium and long term. We remain committed to disciplined stewardship, transparency and long-term value creation.

Danuta Gray

Chair