Consumer Care business review

Performance in 2025

Full year sales in Consumer Care increased by 5.7% to £972.7m (2024: £920.0m) or 7.9% at constant currency. F&F was the standout performer, delivering 15% sales growth at constant currency. This was driven by strong demand for Parfex’s fine fragrances and for Flavours particularly in EMEA, with momentum continuing in the fourth quarter. Beauty Actives sales were up 6% at constant currency with sales growth improving in the second half year against a lower comparator and supported by more robust consumer sentiment in North America. Beauty Care sales were up 4% at constant currency driven by higher sales volumes and aided by our deliberate actions to optimise plant utilisation in certain parts of the portfolio. Pricing in both of our Beauty businesses was positive in Q4. Sales grew 2% at constant currency in Home Care, the smallest business unit in Consumer Care, with a weaker performance in the second half following completion of a major product relaunch by a customer, compounded by order phasing.

Adjusted operating profit increased by 6.0% to £169.8m (2024: £160.2m) or by 7.4% at constant currency. Although the adjusted operating margin of 17.5% (2024: 17.4%) remains significantly below its medium-term potential, it improved slightly compared with both the prior year and H125 due to a stronger performance in Beauty. IFRS operating profit was £95.5m (2024: £128.4m).

Strategic priorities and progress

In line with Group priorities, we are driving more consistent growth in Consumer Care by refocusing innovation, improving customer experience and maximising returns from recent investments. We are also reinvigorating Beauty and enabling continued fast growth in F&F to take full advantage of opportunities in these key Consumer Care markets.

Refocusing innovation

We are refocusing innovation, introducing a new rigorous Group-wide framework, re-balancing R&D resources to place greater emphasis on co-creation with customers and finding new markets for existing ingredients, as well as ramping up the development of new ingredients.

• Customer co-creation involves application-focused innovation, where we work in close collaboration with customers of to meet their performance requirements or help them realise a specific opportunity. An example of bespoke ingredients created in this way is a PEG-free rheology modifier that we developed in collaboration with a global beauty brand
• To accelerate the sales of an existing ingredient, we enhanced the performance of Silverfree, a peptide that reduces grey hair, opening up; a new opportunity with an FMCG multinational
• We have ramped up the development of new ingredients with sales increasing by 10% at constant currency. Launches included:
  - Zenakine™, an active which enhances skin’s resistance to physical and emotional stress, thereby reducing skin fatigue and premature ageing, with customer launches in Europe and Asia
  - Kerabio™ K31, a patented biomimetic bond builder for hair repair, a market which is growing 9% a year. We are first-to-market with a multi-customer ingredient that enables brands to compete with market leaders, which has been sampled by 500 customers since its launch in March 2025

• We seek to leverage sustainability to drive commercial value through the creation of new sustainable ingredients and verification data to prove our claims. We now provide carbon footprint data for over 1,500 product codes in Beauty Care and over 750 in Home Care, enabling customer decision making.

Improving customer experience

We are improving customer experience through our transformation programme, which is sharing best practice, and clearer customer segmentation, enabling us to tailor solutions to differing customer needs.

• With a direct sales force and innovation centres close to customers in key countries globally, our business model is optimised to support customers of all sizes, particularly L&R customers who are continuing to grow strongly. Our prices are normally higher to smaller customers because we provide them with additional support, so less concentration in our customer base is providing more opportunities for us at good margins:
  - Sales to L&R customers increased 9% in constant currency
  - They now represent 82% of Consumer Care sales (2024: 80%)
• We are particularly focused on fast-growing ‘regional giants’ in key Asian markets such as China, Japan, South Korea, Indonesia and India, where we have grown sales to our top 5 regional customers by 19% CAGR at constant currency over the last two years
• As a strategic partner to all major Beauty brands, we grew with four of the top five beauty customers, reflecting their renewed appetite for innovation

The Consumer Care customer Net Promoter Score (NPS), our KPI for customer service, increased to +42 (2024: +31).

Maximising returns from investments

We are maximising returns from recent investments which have included both acquisitions, to expand Beauty Actives and establish an F&F business, and a period of heightened capital expenditure, particularly in fast-growth countries in Asia.

Our capability in ceramides, active ingredients for skin barrier protection and rapid moisturisation, was acquired with Solus Biotech in 2023, with commercialisation initially taking longer than anticipated. With ceramides now being sold across our global sales network and upgraded data packages to verify performance claims, sales were up 36% at constant currency albeit from a low base. We are driving further growth by:

• Leveraging the R&D and formulation expertise across Croda to develop new actives, production methods and mechanisms to deliver ceramides to the skin.
• Expanding the pipeline of new launches across skin, hair and dermatological applications, including new ceramides that enhance scalp health for stronger hair, the first application beyond skin care.

Asia represents the highest-growth Beauty market and has been the fastest-growing region for Croda Beauty over the last three years. We have supported that growth with selective expenditure in new manufacturing capacity including a new low emissions production facility in Dahej, India which is now fully operational and will enable further growth across Asia. We are also commissioning a new facility in Guangzhou, China for fragrances and actives.

Accelerating growth in key markets

Reinvigorating Beauty

Our Beauty businesses have a ~10% share in the $8bn beauty ingredients with top three positions in niches growing faster (3-7%) than the beauty retail market (2.7%) at profit margins that are accretive to the Group. Following a period of inconsistent performance in volatile markets, they delivered an improved performance in 2025 with sales up 6% in Beauty Actives and
by 4% in Beauty Care both at constant currency. To deliver consistent sales growth we are reinvigorating Beauty, building on its reputation for innovation and strong customer relationships to capitalise on the full range of opportunities globally. With greater demand outside Europe, we are internationalising our Actives capabilities beyond the traditional centre in Paris, including regionalising testing and claims substantiation capabilities particularly in Asia to enable greater tailoring to specific country needs. We are also delivering benefits to masstige products, which helped support increased sales growth in the second half year particularly in North America, and where the margins that we make are similar to when we supply ingredients to prestige brands. In Beauty Care, we have the broadest portfolio of innovative ingredients. Enabled by the new innovation framework, we are commercialising and scaling up our biotech pipeline. We are also showcasing Beauty Care as delivery systems for Actives, leveraging our ability to deliver tailor-made solutions to customers comprising multiple ingredients.

Enabling continued fast growth in F&F

F&F is a small but fast-growing player in a $25bn addressable market and is focused on L&R customers mainly in emerging markets who are growing twice as fast as the market as a whole (3.3% CAGR). The Business continued to grow ahead of peers in 2025, delivering 15% sales growth at constant currency, comprising a 13% increase in sales of fragrances and 25% increase in sales of flavours. Demand was particularly strong in Western Europe, the Middle East and Africa. To enable continued fast growth in F&F, we are leveraging its core strengths which include its agile model for higher-growth L&R customers and strong focus on fast-growth emerging markets. This is being supported by light-touch capital expenditure to expand manufacturing capacity and geographic footprint, following major investments over the last three years. Recent investments have included the expansion of fine fragrances at our dedicated innovation and production facilities in Grasse in France, as well as the new manufacturing facility in Guangzhou, China due to commence operations in 2026. F&F is also a focus area for R&D investment particularly for innovation in micro-encapsulation and odour-neutralising fragrances.

Future sales growth

Assuming current economic conditions continue, we are targeting an organic increase in sales in Consumer Care of 3-6% CAGR 2026-28.