Croda: Yorkshire chemicals firm targets savings of £100m by end of 2027
Yorkshire-based chemicals firm Croda International has raised its cost savings target to around £100m by the end of 2027 and is eyeing reductions in headcount.
The Goole-based firm said it was extending its cost-saving target by £60m after it identified opportunities for “further significant operational efficiencies”. The move comes as part of a major multi-year operational efficiency programme.
Croda had previously said it was targeting savings of around £40m between 2024 and 2026.
The firm said it would look to make savings in employee costs, including reductions in management layers and headcount, targeting around £25m of savings.
It also said it would look to make savings in its operational supply chain and direct procurement of raw materials.
Croda added that the efficiency programme would aim to “support operating margin recovery and profitability, offset inflation and mitigate risks to sales growth from continued macro-economic uncertainty”.
The announcement comes as Croda said its cost efficiency measures had given a boost to its margins, despite what it described as an “unpredictable” environment.
Steve Foots, chief executive officer of Croda, said: "Our performance in the first half was in line with our expectations at the start of the year. Higher sales in all businesses and regions reflect improved volumes in Beauty Care and Crop Protection, as well as another period of strong growth in F&F.
“Our actions are helping us navigate a challenging environment, simplifying and modernising our business, and supporting our efforts to enhance margins.
“We have identified a further £60m of cost savings, taking the total to £100m of annualised savings by the end of 2027. There is much more to do but our strategic and operational focus is creating a stronger platform for further progress and our outlook for the full year is unchanged.”
Croda posted pre-tax profit of £85.5m for the six months ending 30 June, an almost 20 per cent drop on last year’s figure of £106.1m.
This came alongside sales of £855.8m, a 4.9 per cent increase on the same period last year, and adjusted EBITDA of £198.5m, a 7.6 per cent increase on last year.
A statement in the group’s results added that it was “mindful” that the “unpredictable political and economic environment” continues to create uncertainty across its markets.
Croda said it was also reviewing its international footprint. A statement from the firm added: “We are reviewing our global manufacturing footprint to optimise production capacity, processes and distribution, ensuring we maximise profitability whilst retaining capacity for growth. This will include a review of the group's production and distribution assets.”