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Croda International (CRDA)

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Tuesday 24 February, 2004

Croda International

Final Results

Croda International PLC
24 February 2004

Tuesday, 24 February 2004

                            Croda International Plc
                     Preliminary Results Announcement 2003

Croda today announces its preliminary results for the year ended 31 December


•         Pre-tax profit on continuing operations up 2% to £38.5m

•         Pre-tax profit of £43m (2002 : £7.6m)

•         Pre-exceptional earnings per share up 8% to 19.2 pence

•         Basic earnings per share of 22.5 pence (2002 : loss of 0.4 pence)

•         Pre-exceptional cash inflow per share up 27% to 25.5 pence

•         Post-exceptional cash inflow per share of 26.9 pence (2002 : 17.4

•         Dividend increased 3% to 11.85 pence

•         Further £23m reduction in net debt to £29m

Commenting on the results, Chairman, Antony Beevor, said:

'In a year when the world economy faced a number of disruptions and Europe saw
little or no economic growth, we believe we did well to achieve a similar level
of sales and operating profits on continuing operations compared to last year
and, at £38.5m, a 2% improvement at the pre-tax level.

The relative robustness of our results has been due to the steps we have taken
to exit those businesses where we did not believe we had a competitive edge and
to concentrate primarily on supplying sophisticated naturally derived
ingredients to manufacturers of personal and other care products.

Trading has started well in 2004, with results ahead of this time last year and
our order book, as ever short term in nature, is looking healthy.  The current
weakness of the US Dollar against Sterling is, however, of some concern.
Exchange rates permitting, with continued growth in Europe and a rebound in the
USA we expect to make progress in 2004.'

For further information, please contact:
 Croda International
 Mike Humphrey, Chief Executive                 Tel:   0207 269 7182 until noon,
                                                then 01405 860551
Barbara Richmond, Group Finance Director

Financial Dynamics
Charlie Armitstead                              Tel:   0207 269 7182

Or visit our web site at: where the presentation to analysts will
be available by midday today.

                              Chairman's Statement


In a year when the world economy faced a number of disruptions and Europe saw
little or no economic growth, we believe we did well to achieve a similar level
of sales and operating profits on continuing operations compared to last year
and, at £38.5m, a 2% improvement at the pre-tax level.

With a small profit from discontinued operations and £4.3m of exceptional
profits, principally from the sale of surplus properties, overall profit before
tax was £43.0m compared to £7.6m the year before.

The pre-exceptional tax charge at 35.4% was at a similar rate to 2002 and
earnings per share before exceptional items were 19.2 pence, an increase of 8%
on last year (basic  earnings per share in 2003 were 22.5 pence compared with a
loss of 0.4  pence the previous year).  This has enabled us to increase the
ordinary dividend for the full year by 3% to 11.85 pence whilst continuing our
objective of gradually increasing dividend cover, this year to 1.6 times based
on profit before exceptional items.

At the start of 2003 we reorganised the UK manufacturing and European sales
structures in our Oleochemicals business and I am glad to report that these
areas have made good progress, in addition to another strong performance by our
Active Ingredients businesses in France. The US Oleochemicals business had a
disappointing year but over half of the sales shortfall was due to converting at
a lower dollar exchange rate compared to the previous year. Although some
business was lost in the USA as we withdrew some commodity products from our
range, we have recently won new orders in the ongoing business so expect 2004
sales to return to previous levels in local currency terms.  Sales in the rest
of the world also showed an improved performance on last year, with Singapore
returning a useful profit after the financing costs of constructing the new

Our Other businesses performed satisfactorily given they incurred over £0.5m of
restructuring charges in the year, the benefits of which will be received in


At the end of the year net debt had fallen to £29.0m from £52.1m a year earlier
due to a strong operating cash flow of £58.9m, helped by disposals and currency
movements.  Capital expenditure for the year was £12.4m, compared to
depreciation of £14.6m.

Strategy for Growth

The relative robustness of our results in recent years has been due to the steps
we have taken to exit those businesses where we did not believe we had a
competitive edge and to concentrate primarily on supplying sophisticated
naturally derived ingredients to manufacturers of personal and other care
products. We are thus operating in a growing and low-cyclical market selling
proprietary products which are increasingly patent protected.  In Europe we are
seeing some early results of the improvement we have made to our marketing
structure and we continue to concentrate on harnessing our world wide product
development skills and resources in an efficient manner. Whilst we will not
ignore value creating acquisitions when the opportunity arises we recognise the
importance of organic growth to our shareholders. We are currently achieving it
most dramatically in our Actives businesses and we are confident of achieving it
across the spread of our business in the future. We are becoming increasingly
involved in healthcare markets. We believe we have leading expertise in lipid
technology for the pharmaceutical sector but we take care not to become
overdependent on any one project because of the long timescales and risks

Safety, Health and the Environment

During 2003 we achieved our target of obtaining ISO14001 environmental
certification for all our established manufacturing operations around the world.
This necessitated much hard work and I congratulate all those involved on an
important and highly worthwhile effort. In addition we have achieved success in
meeting the environmental targets we set ourselves and the accident statistics
at our manufacturing sites are showing an encouraging trend. We believe that no
business can survive in the long term that does not fulfil its obligations to
the communities in which we live, the people who work for us and the third
parties with whom we do business.


These are demanding times for human resources staff with much new, often EU
based, legislation coming into force. Much of the new flexible working and other
rules are built on principles that a wise employer would seek to operate even in
the absence of legislation; it is to be hoped that the rigidities and
bureaucracies that come with the new legislation do not price UK manufacturing
industry still further out of world markets than is already the case.

We have been giving careful thought to our future pension policy, which has of
course become a major issue for UK employers with relatively mature schemes, not
just because of lower investment returns but also because of the increase in
life expectancy. We believe our pension schemes are important to our employees
and to us in attracting and motivating them. We therefore decided to retain the
defined benefit schemes in the UK but, following consultations with staff, on a
basis which shares the burden of the increased cost of funding between the
Company and employees.

I mentioned above the importance we attach to corporate social responsibility; a
further example is the scheme being launched in 2004 for employees to spend up
to three days a year with no loss of pay on approved community projects.

Every year I pay tribute to the loyalty of our staff and the culture that is
particular to Croda. I do so again, confident that we are in excellent shape to
grasp the opportunities that will undoubtedly present themselves.


Trading has started well in 2004, with results ahead of this time last year and
our order book, as ever short term in nature, is looking healthy.  The current
weakness of the US Dollar against Sterling is, however, of some concern.

Exchange rates permitting, with continued growth in Europe and a rebound in the
USA we expect to make progress in 2004.

                                Operating Review

In 2003 we continued to make progress in our objectives to add value for our
shareholders, our customers and our employees.  The established strategy of
focus on business areas that can weather macro-economic shocks was vindicated
once again.  The first half of the year saw major upheavals caused by stuttering
US and European economies, the war in Iraq and the outbreak of SARS in Asia.
Croda emerged with a solid profit performance and excellent cash flow despite
the extra £3.1m of costs we incurred on pensions and insurance.

Sales were flat, due mainly to exiting some low margin business in the USA and
the planned fall in sales of very low margin vegetable oils from our
restructured Seatons operation.  Unfavourable currency movements also had a
negative impact.  The constant pursuit of improved product mix in our
Oleochemicals business led to another impressive operating margin of 16.8%.  The
fall in operating margin in our Other business area was mainly due to
restructuring costs which should deliver improved margins in 2004.

In spite of the slow economy, our ongoing sales in Europe increased by over 5%.
Excluding the UK, European sales grew by 16%, partly as a consequence of
customer manufacturing moving out of the UK to places like Poland.  Sales were
good in all major markets, particularly France, Germany, Italy, Spain and

It was a different story in the Americas.  Sales were down in the USA by 13%,
half of which was currency related.  The other major reason was our withdrawal
from low margin business in laundry softeners.  We therefore have more capacity
to expand in more profitable areas.  Sales in Canada again increased
substantially, especially in the Personal Care segment.  There was also good
growth in Latin America, particularly in Argentina and Mexico.

In Asia, the picture was again mixed.  An excellent performance in Japan saw
sales rise by 7%, but SARS impacted business activity in a number of areas, not
least because travel was almost impossible for a considerable time.  Sales
increased substantially from our Singapore plant.  Sales in the Middle East were
affected by the invasion of Iraq, but there was again some progress in Africa.
In Australia, sales grew by 9%, in spite of a weak performance by our small
joint venture rock anchor operation.

Good growth in Personal Care, combined with even better growth in Health Care,
provides a solid platform for the future.  There was extreme competitive
pressure in the area of Plastics Additives, but margins were maintained in spite
of a drop in sales due to destocking in the polyolefins market.

We increased the pace of new product introductions, with our Actives businesses
leading the way. Sederma's world class expertise in skin care peptides has paid
off handsomely.  The Crodamazon range was expanded further and there were
promising new product launches from all our other major research centres in the
UK, USA and Japan.  New products are embedded in our culture and create our
future profits.

Again, we tightened our strategic focus.  We restructured Seatons and outsourced
all manufacture, with an immediate increase in profitability.  We completed the
exit from our gelatin business, closing the Plymouth site and selling off the
redundant plant and technology.  At the beginning of 2004, we completed the sale
of Croda Fire Fighting Chemicals to Kidde plc.  A number of redundant sites were
also sold during 2003.

We continued to build and strengthen our marketing teams around the world.  We
also continued to invest in our R & D facilities and our production units.
Improvements and expansion took place at all our major sites.  In particular, a
new lipid plant is due on stream at Leek at the end of June, which will enable
us to cope with the strong demand for high purity lipids.  Also we are currently
commissioning a new plant at Rawcliffe Bridge to expand our production of high
added value lanolin derivatives.

I am pleased to report that the SAP rollout continues successfully with Brazil
having gone live in quarter one of 2004 and Singapore due to go live in the
second quarter.

Cash generation has been a focus of all levels of management for the last few
years.  Once again this focus produced good cash flows and leaves us with a
strong balance sheet.


Results                                                           2003                      2002
External turnover              £m                                261.6                     260.1
Trading profit                 £m                                 44.0                      43.4
Margin                         %                                  16.8                      16.7
Capital Employed               £m                                187.1                     196.5
Return on capital              %                                  23.5                      22.1

This is an excellent business with an exciting future.  Trading profits
increased to £44m on sales increased to £261.6m.  Our concentration on value
over volume led to an increase in trading margin to 16.8%.  The core business
now represents 92% of Group sales and 96% of Group trading profit.  This is a
genuine speciality business, as evidenced by the continuing high margin in the
face of a number of raw material cost increases.

Personal Care continues to grow.  Sederma produced another strong performance,
with Matrixyl becoming their best selling product ever.  Crodarom also
introduced many exciting new products and again produced a good profit.

We had expected the USA to perform strongly, but the Iraq war and customer
product launch delays hit our business, as did the translation effect of the
weak US dollar in the second half.  We are confident of a better performance in
2004 in US dollars.

The new pan European company formed at the end of 2002 settled down quickly and
produced an excellent result in sales, but more especially in profits.  We are
confident this will improve further in 2004.

In Latin America, the marketing teams performed well in challenging conditions.
The new lanolin plant in Brazil goes from strength to strength and sales from
the Crodamazon plant in Manaus grew well.  We expect growth from both of these
sites in 2004.

After a 16% sales growth in 2002, the Singapore operation increased sales by a
further 10%.  This business is now solidly in profit and should continue its
strong growth.  Across Asia, the Personal Care business was hit by SARS and
general uncertainty.  Croda Japan continued its good progress, increasing sales
by 5% by focussing on Personal and Health Care.

The Health Care business again showed good growth.  In fact, sales would have
been much higher but for capacity limitations.  The much needed capacity for
high purity lipids will be available during 2004 and we are confident of growth
in this dynamic area.  I should emphasise that this growth is in no way
dependent on the potential pharmaceutical prospects like Provensis and Tillots,
though as and when they bring product to market successfully there will be a
significant step change in this business.

The Home Care business had a year of mixed fortunes, with customer
reformulations working both for us and against us.  Going forward, the signs are
that these are going for us in 2004, with a number of major launches containing
Croda products, especially in fabric care.

Croda's great non-tangible strengths are its intellectual capital and its global
marketing network.  Both continue to grow with more new technology, more patents
and more additions to the marketing teams, including a new office in Thailand.
We are not reliant on any one customer for our future success;  in fact our
largest customer globally represents less than 3% of Group sales.


Results                                                             2003                     2002
External turnover                 £m                                23.7                     26.3
Trading profit                    £m                                 1.8                      2.9
Margin                            %                                  7.6                     11.0
Capital Employed                  £m                                16.7                     16.6
Return on capital                 %                                 10.8                     17.5

This was another challenging year for these small businesses.  They are mainly
Europe orientated and operating in tough end markets.  The fall in sales was due
mainly to the planned withdrawal from cheap commodities at Seatons.  Seatons had
a good year after the closure of UK manufacturing and a successful transfer to
outsourced product.  Croda Application Chemicals grew its sales by over 15% but
its profits were impacted by restructuring costs which should pay back in 2004.
Baxenden Chemicals profits were down due to very competitive market conditions.
Celtite in Australia had another difficult year, but focussing its operations on
one site and a new management team should give improved performance in 2004.

Fire Fighting Chemicals had a solid year of progress but we took the decision to
sell this unit as it no longer fitted our core business objectives.  The
transaction was completed in January 2004 and as a consequence its results are
reported under discontinued operations.


2003 was a year of strong performance against a backdrop of global uncertainty
and challenging trading conditions.  We increased profits in spite of all this
and in the face of increases in pension and insurance costs of £3.1m.  We have a
terrific culture and a dynamic workforce, committed to change and improvement.
We continue to seek suitable acquisitions.  We are confident in our plans for
organic growth in our chosen areas of expertise and in our ability to add value
for all our stakeholders.

It is sad to report that the architect of the modern Croda, Sir Frederick
(Freddie) Wood died in 2003.  He was part of the fabric of Croda, being born on
the original site the year after Croda was founded.  I would like to think he
would be proud of his legacy.  In an annual report some decades ago, he said
that 'the cobbler should stick to his last'.  And that's what Croda has done in
focussing on being the best marketer and producer of speciality oleochemicals to
the global markets of Consumer Care.

                         Financial Review


Overall sales for continuing operations were £285m, the same as the previous
year.  Currency movements, however, reduced reported sales by approximately £2m,
with the strengthening of the Euro being more than offset by the weakening of
the US Dollar.  At current exchange rates, the US Dollar will have a further
negative impact on sales and profit in 2004.

Sales volumes reduced overall in 2003 with a 3% reduction in Oleochemicals and a
31% reduction in our Other businesses.  The large volume reduction in the Other
businesses was due to our withdrawal from trading commodity refined oils in our
Seatons business. Because of the low margins on these products, the impact on
our profits was small.

The combined effect of product mix changes and price increases improved turnover
by over 10%, primarily due to continued growth in sales at the high added value
end of our range.  Overall, the effect on sales of the volume reduction and
price/mix improvement was neutral.

Operating margins remained good at 16.8% in Oleochemicals (2002 : 16.7%).  The
Other businesses saw a fall in operating margin to 8%, primarily because of
£0.5m of restructuring costs included within operating profit.  The benefits of
this restructuring will be seen in 2004.

Exceptional Items

The exceptional items of £4.3m mainly consist of profits made on the disposal of
surplus property and plant, resulting from the sale and closure of businesses in
recent years.

In January 2004 we sold our Fire Fighting Chemicals business for cash
consideration of £4.4m.  There is an exceptional loss on this disposal amounting
to £3.8m of which £0.2m is cash cost and the balance is mainly goodwill.  In
line with generally accepted accounting principles this loss will be included in
the results for 2004.


In line with the geographical spread of our businesses, the pre-exceptional tax
charge for 2003 is 35.4%, very similar to the 35.6% incurred last year.  It is
expected our tax charge will remain around the 35% level in 2004.


As I am sure you are aware, it has for some time been your Board's intention to
increase dividend cover over the next few years, whilst at the same time
maintaining a progressive dividend policy.

Accordingly, your Board is proposing a final dividend of 7.83 pence making a
total of 11.85 pence for the year, an increase of 3%.  This also raises our 
dividend cover from 1.5 times to 1.6 times, based on profit before exceptional 

With further strong cash generation in 2003, the pre-exceptional cash inflow per
share was up 27% to 25.5 pence giving cash dividend cover of over 2 times.  For
reference, the post-exceptional cash inflow per share was 26.9 pence.


We had another successful year for cash generation with a net cash inflow of
over £20m.  In addition, because the majority of our debt is US Dollar
denominated, we saw a further £3m reduction in debt due to currency.  Our total
net debt at 31 December 2003 stood at £29m (2002 : £52.1m).

Our interest expense reduced accordingly from £4m in 2002 to £2.9m in 2003.

Capital expenditure was lower than usual at £12.4m in 2003, compared to
depreciation of £14.6m.  It is expected capital expenditure will be a little
higher in 2004 and close to the depreciation charge.

Treasury Policy

The Group's treasury policies are approved by the Board and subject to regular
reporting and review.

The main financial risks faced by the Group relate to currency, interest rates
and the availability of capital.

As far as currency risk is concerned, transaction risk is hedged up to three
months forward by the use of foreign currency bank balances and forward currency
contracts.  Translation currency exposure is not hedged but the risk is reduced
by matching interest expense to foreign currency earnings where it is efficient
to do so.

In terms of interest rate risk the policy is to maintain at least half of the
Group's borrowings at floating interest rates, with interest rate swaps being
used where appropriate.

On 1 December 2003 the UK regulations on the market purchase and holding of a
company's own shares (Treasury Shares) were amended to enable companies to
achieve more flexibility on their levels of debt and equity and thus their cost
of capital. These changes give us an additional means of managing our Balance
Sheet if and when considered appropriate by your Board.


Croda operates defined benefit and defined contribution pension schemes.  Our
largest single scheme is our long-standing UK defined benefit scheme.  As I did
last year, in order to show our current UK pension situation, I have summarised
the pension position at 31 December 2003 and 2002, together with the latest
actuarial valuation in a table below.

The net asset under SSAP 24 and the net liability under FRS 17 are both only
marginally different this year end compared to last.  The FRS 17 deficit has not
reduced, despite some recovery in the stock market, because the rate at which
liabilities are discounted has fallen and the rate of inflation applied to
future pension payments has increased.  As I reported last year, it is the
triennial actuarial valuation which forms the basis of our long term funding
decisions and is, therefore, of more importance than the accounting assets and

                                      2002           2003           2003          2002           2002
                                 Actuarial        SSAP 24         FRS 17       SSAP 24         FRS 17
                                        £m             £m             £m            £m             £m
Asset/(liability)                   (35.1)           33.1         (91.8)          32.2         (89.7)
Deferred tax                          10.5         (10.0)           27.6         (9.7)           26.9
Net asset/(liability)               (24.6)           23.1         (64.2)          22.5         (62.8)

I have also produced a table showing the charge to the Profit and Loss Account
for our UK schemes under the two Accounting Standards and our estimate of the
2004 expense.

                                                   2004               2004           2003           2003
                                              Estimated          Estimated
                                                SSAP 24             FRS 17        SSAP 24         FRS 17
                                                     £m                 £m             £m             £m
Before operating profit                             5.3                4.9            5.4            4.3
Financing                                             -              (0.5)              -            0.7
Net cost                                            5.3                4.4            5.4            5.0

As is evident from the table we do not expect a significant change in our
pensions expense in 2004 under SSAP 24.  Had we been applying FRS 17 in 2004 our
pension cost would have reduced to £4.4m.  Again, you may recall I mentioned in
last years' Financial Review that under FRS 17 there is likely to be more
volatility in pension expenses than under SSAP 24.  These figures clearly 
illustrate that point.

Croda International Plc

Preliminary announcement of trading results for the year ended 31 December 2003

Group profit and loss account
                                          Continuing       Discontinued               2003
                                          operations         operations              Total
                                                  £m                 £m                 £m

Turnover                                       285.3               18.1              303.4
                                              ______             ______             ______

Operating profit
Group operating profit                          39.2                0.2               39.4
Share of associates'
operating profit                                 2.2                  -                2.2
                                              ______             ______             ______
Total operating profit                          41.4                0.2               41.6

Exceptional items                                  -                4.3                4.3

Net interest payable                           (2.9)                  -              (2.9)
                                              ______             ______             ______
Profit before taxation                          38.5                4.5               43.0
                                              ______             ______             ______

UK taxation                                                                          (2.9)
Overseas taxation                                                                   (10.8)
Tax on exceptional items                                                                 -
Profit after taxation                                                                 29.3

Minority interests and
preference dividends                                                                     -
Profit attributable to
ordinary shareholders                                                                 29.3
Ordinary dividends                                                                  (15.5)
Reserves transfer                                                                     13.8

Earnings per share                                                               Pence per
Basic                                                                                 22.5
Basic before exceptional
items                                                                                 19.2
Ordinary dividends
Interim                                                                               4.02
Final                                                                                 7.83

Group profit and loss account (continued)
                                          Continuing       Discontinued               2002
                                          operations         operations              Total
                                                  £m                 £m                 £m

Turnover                                       286.4               27.2              313.6
                                              ______             ______             ______

Operating profit
Group operating profit                          39.5              (1.4)               38.1
Share of associates'
operating profit                                 2.4                  -                2.4
                                              ______             ______             ______
Total operating profit                          41.9              (1.4)               40.5

Exceptional items                                  -             (28.9)             (28.9)

Net interest payable                           (4.0)                  -              (4.0)
                                              ______             ______             ______
Profit before taxation                          37.9             (30.3)                7.6
                                              ______             ______             ______

UK taxation                                                                          (1.6)
Overseas taxation                                                                   (11.4)
Tax on exceptional items                                                               5.0
Profit after taxation                                                                (0.4)

Minority interests and
preference dividends                                                                 (0.1)
Profit attributable to
ordinary shareholders                                                                (0.5)
Ordinary dividends                                                                  (15.0)
Reserves transfer                                                                   (15.5)

Earnings per share                                                               Pence per
Basic                                                                                (0.4)
Basic before exceptional
items                                                                                 17.8
Ordinary dividends
Interim                                                                               3.91
Final                                                                                 7.59

Summarised balance sheet
                                                                                                As restated
                                                                At 31 December               At 31 December
                                                                          2003                         2002
                                                                            £m                           £m

Fixed assets                                                             150.3                        159.0
Stock                                                                     51.8                         51.5
Debtors                                                                   90.4                         89.7
Cash at bank and in hand                                                  27.8                         24.2
Creditors falling due within one year                                   (86.9)                       (83.1)
Creditors falling due after one year                                    (37.6)                       (61.6)
Provisions for liabilities and charges                                  (32.2)                       (31.2)
                                                                        ______                       ______
                                                                         163.6                        148.5
                                                                        ______                       ______

Shareholders' funds                                                      162.4                        147.4
Minority interests                                                         1.2                          1.1
                                                                        ______                       ______
                                                                         163.6                        148.5
                                                                        ______                       ______

Movement in shareholders' funds

Profit attributable to ordinary shareholders                              29.3                        (0.5)
Ordinary dividends                                                      (15.5)                       (15.0)
Goodwill written back on disposal                                            -                          5.2
Currency translation differences                                           1.4                        (1.6)
Transactions in own shares                                               (0.2)                        (0.8)
                                                                        ______                       ______

Net movement in shareholders' funds                                       15.0                       (12.7)
Opening shareholders' funds                                              147.4                        160.1
                                                                        ______                       ______
Closing shareholders' funds                                              162.4                        147.4
                                                                        ______                       ______


With the exception of the prior year adjustment explained in note 5 to the
preliminary announcement there were no other recognised gains or losses except
for those detailed above.

Summarised cash flow
                                                                                                As restated
                                                                          2003                         2002
                                                                            £m                           £m

Group operating profit                                                    39.4                         38.1
Depreciation                                                              14.6                         15.7
Amortisation                                                               0.5                          0.4
Working capital                                                            3.6                          1.4
Other                                                                      0.8                        (4.0)
                                                                        ______                       ______

Operating cash flow                                                       58.9                         51.6

Interest                                                                 (2.8)                        (3.9)
Dividends paid                                                          (15.1)                       (14.8)
Taxation                                                                (12.2)                       (10.7)
Fixed assets purchased                                                  (12.3)                       (13.9)
Sale of fixed assets                                                       4.9                          0.5
Net purchase of own shares                                               (0.2)                        (0.8)
Disposals                                                                    -                          0.7
Other                                                                    (1.1)                        (0.7)
                                                                        ______                       ______

Movement in net debt from cash flows                                      20.1                          8.0
New finance lease contracts                                              (0.1)                        (0.2)
Exchange differences                                                       3.1                          3.7
                                                                        ______                       ______

Movement in net debt in the period                                        23.1                         11.5

Net debt brought forward                                                (52.1)                       (63.6)
                                                                        ______                       ______

Net debt carried forward                                                (29.0)                       (52.1)
                                                                        ______                       ______

Notes to the preliminary announcement

1.   Segmental analysis of continuing operations
                                                                          2003                  As restated
                                                                            £m                         2002
Oleochemicals                                                            261.6                        260.1
Other                                                                     23.7                         26.3
                                                                        ______                       ______
                                                                         285.3                        286.4
                                                                        ______                       ______
Trading profit
Oleochemicals                                                             44.0                         43.4
Other                                                                      1.8                          2.9
                                                                        ______                       ______
                                                                          45.8                         46.3

Central costs                                                            (4.4)                        (4.4)
                                                                        ______                       ______
Operating profit                                                          41.4                         41.9
                                                                        ______                       ______

Turnover by geographical destination

United Kingdom                                                            43.7                         49.1
Rest of Europe                                                            88.0                         75.9
Americas                                                                  89.3                         97.3
Asia                                                                      37.1                         38.8
Rest of World                                                             27.2                         25.3
                                                                        ______                       ______
                                                                         285.3                        286.4
                                                                        ______                       ______

Turnover by market

Personal and Health Care                                                 164.5                        160.7
Home Care and Plastics Additives                                          39.9                         43.7
Industrial Specialities                                                   57.2                         55.7
Other                                                                     23.7                         26.3
                                                                        ______                       ______
                                                                         285.3                        286.4
                                                                        ______                       ______

2.         Exceptional items

Disposal and closure of discontinued operations
Profit/(loss) on disposal                                                  1.2                       (23.7)
Goodwill written back                                                        -                        (5.2)
                                                                        ______                       ______
                                                                           1.2                       (28.9)

Profit on disposal of fixed assets                                         3.1                            -
in discontinued operations                                              ______                       ______
                                                                           4.3                       (28.9)
                                                                        ______                       ______

3.         Shareholders' funds

Throughout this announcement shareholders' funds include non-equity interests of

4.         Cash flow

The other item before operating cash flow includes adjustments in respect of the
SSAP 24 credit of £0.9m (2002 £3.5m) and a loss on the disposal and write off of
fixed assets of £1.7m (2002 £0.3m).

5.         Additional matters

a.   The financial information above is derived from the Group's full
     statutory accounts on which the auditors have reported;  their report was
     unqualified and did not contain a statement under section 237(2) or (3) of 
     the Companies Act 1985.  Statutory accounts for 2002 have been filed with 
     the Registrar of Companies and those for 2003 will be delivered following 
     the Annual General Meeting.

b.   The proposed final dividend of 7.83p will be paid on 6 July 2004 to
     shareholders registered on 4 June 2004.

c.   The above financial information has been prepared on the basis of the
     accounting policies which are to be set out in the Group's 2003 statutory
     accounts, and in accordance with all applicable UK accounting standards and 
     the Companies Act 1985.  The accounting policies are consistent with those 
     applied in previous years as set out in the Group's 2002 statutory accounts 
     with the exception of a change in accounting policy for transactions in 
     Croda International Plc's own shares arising from the early adoption of 
     UITF 38.  The previous policy of the Group was to treat own shares held in 
     our employee share trusts as fixed asset investments with any difference 
     between the price paid for the shares and the option prices amortised over 
     the period to the option vesting.  Under UITF 38 own shares are treated as 
     deductions from shareholders' funds.  This change in accounting policy 
     results in a prior year adjustment, reducing shareholders' funds at 1 
     January 2002 by £13.7m and increasing the profit before tax for the year 
     ended 31 December 2002 by £0.2m.  For the year ended 31 December 2003 the 
     profit before tax has increased by £0.2m due to the change in accounting 

                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                                                                                  

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