Final Results

Croda International PLC
28 February 2001

Wednesday, 28 February 2001

Croda International Plc

Preliminary Results Announcement 2000

Croda today announces its preliminary results for the year ended 31 December
2000:
Highlights
£m                                                                 2000    1999

Pre-tax profit                                                     48.4    24.8

Pre-tax profit before exceptionals for continuing operations       36.1    37.1

Dividends per share                                                 11p   10.7p

  * Restructuring substantially complete

  * Now a focussed oleochemicals business

  * Oleochemicals margins 17%

  * Over £60m raised from disposals in last 6 months

  * Gearing reduced to 47% following Resins disposal

  * Excellent sales progress in the Americas and Asia

  * Good start to 2001

Commenting on the results, Chairman, Keith Hopkins, said:

'We continued to focus our business on Oleochemicals which during the nineties
achieved compound growth of 7.5% in sales and 13.5% in trading profits. We
substantially completed our reshaping of the business with the disposal of our
Adhesives business in October 2000 and Resins in February 2001.

Trading this year has started well, with results ahead of our performance last
year.'



For further information, please contact:
Mike Humphrey, Chief Executive                         Tel: [phone]

Barbara Richmond, Group Finance Director               Tel: [phone]
Tom Baldock      Financial Dynamics             Tel: [phone]

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












                             Chairman's Statement





As we had expected, trading in the last six months of 2000 proved to be more
difficult primarily due to the poor demand from UK manufacturing industry.
Profit, before tax and exceptional items, for the year was £38.1m compared to
the £40.5m we achieved last year. Turnover from continuing operations at £308m
was a little ahead of last year. While sales in the UK continued to decline
elsewhere useful gains were made despite the weakness of the Euro.

With a higher tax charge than last year due to a decrease in the proportion of
UK to overseas profits, earnings per share were 19.0p (1999 20.4p). The Board
recommends a final dividend of 7.25p, an increase of 2.8% on the 7.05p paid
last year, making a total of 11p for the year (1999 10.7p). The final dividend
will be paid on 6 July 2001 following approval by shareholders at our AGM on
24 April 2001.

Trading

UK sales fell and indeed some customers moved their operations overseas. Our
European operations continued to make strong progress with sales from
continuing operations 9% up in local currencies. The performance in our
American operations was again outstanding with further strong growth in sales
and profits and a continuing flow of good opportunities for next year. In Asia
sales in continuing operations rose by 13%.

Overall our Oleochemical operations put in a robust performance with sales
rising to £256m (1999 £249m) and operating profits moving forward to £43.4m
compared with £42.3m the previous year. Operating margins were in line with
those achieved in1999. Commissioning problems in our new Singapore plant held
back profits but production volumes are now growing. Our Japanese operation
had a record year, far exceeding last year's good performance, as sales of
high value specialities from our factory in Japan grew strongly both in home
and export markets.

Industrial chemicals profits were particularly badly hit by the fall in UK
activity. On sales down 6% at £51.5m, profits from continuing operations were
a little lower at £5.5m in 2000 compared to £6m in 1999. Good progress was
made in our Fire Fighting Chemical operations following their consolidation on
to one UK site. A technical breakthrough in the production of fire-fighting
foams is expected to lead to a strong performance in 2001. Elsewhere our
associate, Baxenden Chemicals, recovered well.

Corporate Development

We continued to focus our business on Oleochemicals which has for many years
made such good progress. Sales have grown at an annual compound rate of 7.5%
during the nineties and profits at a compound rate of 13.5%. This is a world
class performance and there remain many further opportunities.

We continued to dispose of non-core assets and in October 2000 sold our
Adhesive operations to Sovereign Specialty Chemicals for £43.3m which gave
rise to an exceptional profit of £18.2m before goodwill of £7.9m is written
back. In February this year we sold our Resins business to Cray Valley Ltd for
£17m. The results from this business are included in discontinued operations
but the surplus from the disposal will be included in our 2001 accounts. It is
our intention to complete our disposal programme over the next two years and
use the money to invest in and develop our core speciality chemical business.

Finance

Capital expenditure in 2000 was £29.6m (1999 £30.7m) compared to a
depreciation charge of £14.9m (1999 £19.1m). The major spend was for our new
plant in Singapore and in the UK on new ERP computer systems. The introduction
of these systems into one of our UK divisions caused some initial disruption
but the start of the subsequent roll-out has gone to plan. The development of
our web site, croda.co.uk, and our intranet and extranet continues apace, and
are being piloted with a number of major customers. Amortisation of acquired
goodwill was £0.4m (1999 £0.5m).

Following the disposal of Adhesives, net debt fell to £99.8m (1999 £116.9m)
giving gearing of 55% at the year end and interest cover of 5.3 times.


The Board

2001 will see a number of major changes to the structure of your Board. Trevor
Harrison who has been a non-executive director for eight years and Chairman of
the audit committee and pension fund trustees will retire at our Annual
General Meeting this April. We thank him for his wise advice and the
contribution he has made to the workings of the Board. Roy Fenney who has been
in charge of the Industrial Chemicals sector will take early retirement at the
end of March. Roy has been on the Board for 13 years and has borne the
considerable task of disposing of and rationalising businesses in our
reshaping of the Group. We thank him for the tireless and considerate way he
has dealt with the many problems and wish him a long and happy retirement.
With the focussing of the Group on Oleochemicals we have decided to reduce the
size of the Board to a non-executive Chairman, Chief Executive, Finance
Director and two non-executive directors. As a consequence Geoff Bull will
stand down from the Board at the same time but will continue with his existing
European Oleochemical responsibilities and take on from Roy the direction of
our remaining businesses in Industrial Chemicals.

Finally, after 25 years with the Group and in total 15 years as Chief
Executive and then Chairman I will retire at the end of the year and be
succeeded as Chairman by Antony Beevor who has been on the Board as a
non-executive director for five years. I would like to thank all my colleagues
on the Board and all the people both in and outside Croda for the help and
consideration they have given me over the years. It has been both a pleasure
and a privilege to lead such a fine company.

People

The millennium year has been a testing time for UK manufacturing and once
again the Board, on behalf of our shareholders, would like to express their
sincere thanks to all of our employees for the hard work and effort they have
put in during the year.

Outlook

Although it is still early in the year trading has started well, with results
ahead of our performance last year. Our vegetable oil raw materials remain at
low and seemingly stable price levels and the nascent recovery in the Euro is
a welcome sign for export margins. In my last year as Chairman I am certainly
not going to break the habit of a lifetime and make a forecast of the outcome
for the year but suffice it to say that we expect to make progress.

                               Operating Review

One can argue whether 2000 was the first year of a new millennium or the final
year of the last one, but everyone would agree that it was a tough year for
speciality chemicals companies in the UK. In such difficult circumstances, I
am pleased to report that Croda's core Oleochemical business managed to
increase both sales and profits. In our continuing Industrial Chemicals
businesses, the heavy reliance on a very weak UK market led to a further fall
in both sales and profits. Overall this resulted in flat sales and profits for
the Group's continuing operations.

Once again, Croda's North American operations produced superb results through
constant innovation in marketing and product development. Double digit sales
growth continued in Asia in spite of the late commissioning of the new plant
in Singapore. Croda Japan had a record year in sales and profits with
continued strong growth in exports of high value personal care specialities.

There was a mixed picture in Europe with good growth in Mainland and Eastern
Europe contrasting with a further unwelcome decline in UK sales, centred on
the Industrial Chemicals operations. Sederma once again led the way in
valuable new product launches and the recently established Croda Iberica
produced results ahead of expectations.

The drive towards a higher quality business meant that volumes were down but
average prices were up. New technology plant in our Health Care business was
successfully commissioned and the exciting developments in pharmaceutical
products, highlighted by the long term supply agreement with Provensis,
justify the many years of creative research in this area.

We are well on track to meet our restructuring targets. We sold the worldwide
Adhesives operations to Sovereign Specialty Chemicals and our Resins
operations to Cray Valley Ltd. We consolidated our UK manufacturing by closing
sites in both the Colloids and Fire Fighting businesses with no disruption to
customers. Our plants now operate more efficiently and by utilising excellent
technology on the key sites in these divisions they deliver more valuable
capacity.

The introduction of new technologies is never achieved without some heartache.
This was emphasised by the late commissioning of our new plant in Singapore
which was exacerbated by a series of equipment failures. I am pleased to
report that the hard work and dedication of the team in Singapore is starting
to pay off and the plant is now running smoothly.

The implementation of new computer systems seems to have an almost mythical
ability to knock companies off course. Croda has been no exception. The pilot
introduction of SAP at Croda Universal gave temporary problems which reduced
sales and profits in 2000. The system is now performing well. This pilot
introduction enabled us to implement the new system in the more complex arena
of Croda Chemicals much more effectively. The system went live in January and
is performing ahead of forecast. The employees in these divisions deserve full
credit for the massive effort sustained to achieve this notable success.

It was a privilege to be part of this dynamic company as it celebrated 75
years of creative chemistry. 2000 was a year of major challenges and major
progress as we continued to focus the business on the areas of profitable
opportunity. As we strengthen the balance sheet we will seek out acquisitions
to complement and enhance our position as a true speciality chemical company.

Oleochemicals
Results                                                    2000            1999
                                                             £m              £m

External turnover                                         256.4           249.0

Trading profit                                             43.4            42.3

Capital employed                                          226.7           208.5

Return on capital                                         19.1%           20.3%

In a year of many challenges, turnover grew by 3% and profits by 2.6%. The
impact of SAP implementation and non-availability of capacity in Singapore
held up progress. Margins were maintained as a result of product mix
improvements and the shedding of higher volume, lower profit business. The
Oleochemicals business continues to be of very high quality with great
potential.

The global distribution platform is a key to future growth and we have added
to our recent successful start-ups in Spain and Argentina by opening a
subsidiary in Korea. We are also in the process of buying out our partner in
Mexico and establishing a wholly owned subsidiary to focus on the growth of
Croda product sales in this dynamic territory.

Once again the Americas led the success of the core business. In continuing
businesses, turnover was a record £97.5m compared to £90.5m in 1999. Contrary
to other public statements, we saw no slowdown in our main market areas of
personal and home care in the fourth quarter. This quality performance was led
by Croda Inc. which continued with its programme of successful new product
launches. We have initiated a programme of investment in plant capacity in our
core US operation to support future planned growth. We continue to increase
our investment in R & D and expand the pipeline of new products created by our
North American Technical Centre. Sales in Latin America grew strongly as a
result of our increased focus.

Sales in Asia grew by over 13% following the extremely strong growth in 1999.
Most areas performed well, led by excellent sales growth in Japan, China and
Singapore. The major issue in the region was the under performance of the
Singapore manufacturing operation.

This was a disappointment but we are confident all the significant problems
are behind us. We look forward to ever increasing output throughout 2001 to
meet the pent up demand. The focus on high added value specialities and an
excellent team produced a record result in Japan for both turnover and profit.
Sales inside Japan grew by over 20% with commensurate growth of exports
through the Croda global network. The Asian economies continue to grow and as
part of the regional plan we opened Croda Korea in the last quarter of 2000,
which will rapidly increase our market penetration. Sales in India also grew
substantially.

The UK market for our Oleochemicals business was again uninspiring. The
introduction of SAP into our major UK operations did cause problems and
resulted in reduced profits. However, we are confident we have weathered that
particular storm as evidenced by the relatively smooth roll out into Croda
Chemicals in January. Prices of oleochemical raw materials, with one or two
exceptions, remained benign and there are no signs of any change as we go into
2001.

Growth continued in Western Europe with particularly good performances in
Germany, France, Italy and Spain. Poland was once again the growth leader in
our small Eastern European group. Sederma's new product 'machine' turned out
more exciting molecules to increase our sales in the fast growing Actives
market. Great R & D creates great products and the future looks very
encouraging in both Sederma and Crodarom, our plant extracts business.

Industrial Chemicals
Results                                                    2000            1999
                                                             £m              £m

External turnover                                          51.5            54.8

Trading profit                                              5.5             6.0

Capital employed                                           34.1            29.2

Return on capital                                         16.1%           20.5%



This sector continued to suffer a weak UK market and strong competition from
Eurozone based competitors. Also, it was affected much more by very firm
petrochemical raw material prices. In continuing businesses, sales fell by
6.0% and profits by 8.3% mainly due to a poor performance by Celtite Australia
which was somewhat offset by a recovery at our associate, Baxenden Chemicals
Ltd. There was a good performance in Fire Fighting Chemicals where an exciting
new product launch means we will build a small factory in the USA to
complement our efficient operations in the UK and France. Application
Chemicals also performed well in demanding markets. Most of the restructuring
is now complete. The Adhesives operations were sold in the latter part of
2000, our Resins operations in February this year and negotiations are well
advanced for the sale of our 50% share of the Croda Herberts business in
Australia.

Future Plans

Continued investment in new productive capacity, in focussed creative R & D
and the successful divestment of non-core businesses gives us a terrific
platform for future profit growth. We continue to pursue value enhancing
acquisitions in our key business areas and look forward to continued
improvement in 2001 and beyond.



                               Financial Review

Trading

The Group progressed its development into a speciality oleochemicals business
with the disposal, in October 2000, of our worldwide Adhesives business to
Sovereign Specialty Chemicals and in February 2001 of the worldwide Resins
business to Cray Valley Ltd, part of TotalFinaElf.

Whilst demand continued to grow in the core business, operational difficulties
in the commissioning of the new Singapore site held back profit growth. In
Oleochemicals an improvement in product mix more than offset the effect of
much lower volumes of commodity products. Overall volumes in Oleochemicals
were 2.5% lower.

Volumes in Industrial Chemicals were down half a per cent, with competitive
pressures remaining high.

Currency movements continued to affect the Group in 2000 with an overall 1%
positive effect on turnover. The effect on profits was, however, broadly
neutral as the benefits came primarily from the translation of the results of
our US subsidiary into Sterling whereas the negative effect was the
transaction cost of selling UK manufactured goods in Euros.

In 2000, pension costs rose substantially to £4.6m (1999: £1.2m) following the
elimination of the surplus in one of our UK pension schemes. The Group also
changed its estimated life for the majority of plant and equipment from 10
years to 15 years, as a consequence of which the depreciation charge for the
year was reduced by £3.7m on a like for like basis. Redundancy costs were
higher in 2000 at £0.9m, compared to £0.5m in 1999.

Exceptional Item

The only exceptional item in the 2000 results was the profit on disposal for
the Adhesives business of £10.3m after the write-back of goodwill previously
written off. Results from Resins are included in discontinued operations and
any profit on this disposal will be included in next year's accounts.



Taxation

Last year I reported that we expected our tax charge to rise in 2000 due to
the increasing proportion of our earnings generated overseas in countries
where the corporate tax rates are higher than those in the UK. The result was
an effective tax rate of 33.9% for 2000, compared with 32% in 1999. We would
expect the overall rate to rise again in 2001 to between 35% and 36%.

Dividend and Treasury

The proposed final dividend of 7.25 pence gives a total for the year of 11
pence and dividend cover of 1.7 times.

During 2000 the Group reduced net debt by £17.1m. Proceeds from the disposal
of the Adhesives business amounted to £43.3m, with £41.4m received in October
2000 and the balance earlier this month. Capital expenditure on fixed assets
amounted to £29.6m which was twice the depreciation charge. Subsequent to the
year end we sold our Resins business and in consequence our net debt has
fallen to £86m, with gearing of approximately 47%.

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 one
month forward by the use of forward currency contracts and foreign currency
bank balances. 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.

The Group's borrowings are predominantly in Sterling, US Dollars and Euros. To
reduce exposure to large fluctuations in interest rates, a proportion of Group
debt is maintained at fixed rates. Our policy is for fixed rate debt to be
less than 50% of total net debt. The proportion was 37% at the year end.

Our policy is for the proportion of net debt due for repayment in the next
twelve months to be below 30% and at the year end it was 13%.


Employee Share Ownership

During the year we continued with our policy of purchasing shares in the
market as the primary means of funding our options schemes. We acquired 0.7m
shares at an average price of 241p bringing the total held to five million,
representing 70% of options currently outstanding.



Croda International Plc, Preliminary announcement of trading results for the
year ended

31 December 2000

Group profit and loss account
                                  Continuing        Discontinued           2000

                                  operations          operations          Total

                                          £m                  £m             £m

Turnover                               307.9                58.0          365.9
                                     _______             _______        _______

Operating profit

Group operating profit                  41.3                 2.0           43.3
Share of associates'
operating profit                         3.6                   -            3.6

                                     _______             _______        _______

Total operating profit                  44.9                 2.0           46.9
                                     _______             _______

Exceptional profit on
disposal of discontinued
operations                                                                 10.3

Net interest payable                                                      (8.8)
                                                                        _______

Profit before taxation                                                     48.4

UK taxation                                                               (1.7)
Overseas taxation                                                        (11.2)
Tax on exceptional items                                                  (3.2)
                                                                        _______

Profit after taxation                                                      32.3

Minority interests and
preference dividends                                                      (0.2)
                                                                        _______
Profit attributable to
ordinary shareholders                                                      32.1

Ordinary dividends                                                       (14.5)
                                                                        _______

Reserves transfer                                                          17.6
                                                                        _______

Earnings per share                                                    Pence per

                                                                          share

Basic                                                                      24.4
Before exceptional items                                                   19.0

Ordinary dividends

Interim                                                                    3.75
Final                                                                      7.25


                          Continuing   Continuing     Discontinued         1999

                          operations   operations       operations        Total

                              Before  Exceptional

                         exceptional        items

                               items
                                               £m               £m           £m
                                  £m

Turnover                       303.8            -             68.0        371.8
                             _______      _______          _______      _______

Operating profit

Group operating profit          41.7        (8.3)              3.4         36.8

Share of associates              2.9            -                -          2.9
operating profit
                             _______      _______          _______      _______

Total operating profit          44.6        (8.3)              3.4         39.7
                             _______      _______          _______      _______

Exceptional profit on
disposal of discontinued
operations                                                                (7.4)

Net interest payable                                                      (7.5)
                                                                        _______

Profit before taxation                                                     24.8

UK taxation                                                               (3.5)
Overseas taxation                                                         (9.4)
Tax on exceptional items                                                    1.4
                                                                        _______

Profit after taxation                                                      13.3

Minority interests and
preference dividends                                                      (0.4)
                                                                        _______

Profit attributable to
ordinary shareholders                                                      12.9

Ordinary dividends                                                       (14.1)
                                                                        _______

Reserves transfer                                                         (1.2)
                                                                        _______

Earnings per share                                                    Pence per

                                                                          share

Basic                                                                       9.7
Before exceptional items                                                   20.4

Ordinary dividends

Interim                                                                    3.65
Final                                                                      7.05





Summarised balance sheet


                                          At 31 December         At 31 December
                                                    2000                   1999
                                                      £m                     £m

Fixed assets                                       196.9                  196.4
Stock                                               68.7                   64.1
Debtors                                            105.8                  110.4
Creditors and provisions                          (91.3)                 (99.2)
                                                 _______                _______
                                                   280.1                  271.7
                                                 _______                _______

Shareholders' funds                                178.6                  153.4
Minority interests                                   1.7                    1.4
                                                 _______                _______

                                                   180.3                  154.8
Net debt                                            99.8                  116.9
                                                 _______                _______
                                                   280.1                  271.7
                                                 _______                _______





Movement in shareholders' funds

                                                            2000           1999
                                                              £m             £m

Profit attributable to
ordinary shareholders                                       32.1           12.9

Ordinary dividends                                        (14.5)         (14.1)

Goodwill written back on
disposal                                                     7.9            0.4

Currency translation
differences                                                (0.3)          (0.6)
                                                         _______        _______
Net movement in
shareholders' funds                                         25.2          (1.4)

Opening shareholders'
funds                                                      153.4          154.8
                                                         _______        _______

Closing shareholders' funds                                178.6          153.4
                                                         _______        _______



Note

There were no recognised gains or losses except for those included above



Summarised cash flow
                                                            2000           1999
                                                              £m             £m


Group pre exceptional
operating profit                                            43.3           45.1
Depreciation                                                14.9           19.1
Goodwill amortisation                                        0.4            0.5
Working capital                                           (11.8)          (5.6)
Other                                                      (2.0)          (0.3)
                                                         _______        _______

Operating cash flow                                         44.8           58.8
Interest                                                   (8.6)          (7.2)
Dividends paid                                            (14.2)          (9.3)
Taxation                                                  (13.8)         (12.2)
Fixed assets purchased                                    (29.2)         (30.5)
Purchase of own shares                                     (1.8)          (7.9)
Disposals                                                   41.4            0.4
Other                                                        1.7          (1.1)
                                                         _______        _______
Movement in net debt from
cash flows                                                  20.3          (9.0)

New finance lease
contracts                                                  (0.4)          (0.2)

Exchange differences                                       (2.8)          (0.3)
                                                         _______        _______
Movement in net debt in the
period                                                      17.1          (9.5)
                                                         _______        _______



Notes to the preliminary announcement



1.     Segmental analysis of continuing operations (pre-exceptional)


                                                              2000         1999
                                                                £m           £m

Turnover
Oleochemicals                                                256.4        249.0
Industrial Chemicals                                          51.5         54.8
                                                           _______      _______
                                                             307.9        303.8
                                                           _______      _______
Trading profit
Oleochemicals                                                 43.4         42.3
Industrial Chemicals                                           5.5          6.0
                                                           _______      _______
                                                              48.9         48.3

Central costs                                                (4.0)        (3.7)
                                                           _______      _______
Operating profit                                              44.9         44.6
                                                           _______      _______

Turnover by geographical destination

United Kingdom                                                64.4         71.3

Rest of Europe                                                82.9         81.3

Americas                                                      97.5         90.5

Asia                                                          36.1         31.9

Rest of World                                                 27.0         28.8
                                                           _______      _______
                                                             307.9        303.8
                                                           _______      _______



2.     Exceptional items before operating profit


             The 1999 charge related to the costs associated with
        consolidating the Group's production onto fewer operating sites.

            3.     Exceptional items after operating profit

             The profit on disposal of discontinued operations in 2000 of £
        10.3m relates to the disposal of the Group's worldwide Adhesives
        business, and is after charging goodwill written back of £7.9m. The
        1999 loss principally related to the disposal and closure of the
        Group's Colours business and included goodwill written back of £0.4m.

            4.     Additional matters

                 a.     The financial information above is derived from the
            Group's full statutory accounts on which the auditors have
            reported; their reports were unqualified and did not contain a
            statement under section 237(2) or (3) of the Companies Act 1985.
            Statutory accounts for 1999 have been filed with the Registrar of
            Companies and those for 2000 will be delivered following the
            Annual General Meeting.

                 b.     The final dividend of 7.25p will be paid on 6 July
            2001 to shareholders registered on 8 June 2001.

                 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 2000 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 1999 statutory accounts.