Croda International Plc. Interim Results for the Six Months to 30 June 2009 STRONG PERFORMANCE IN CORE CONSUMER CARE BUSINESS

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1 Croda International Plc Interim Results for the Six Months to 30 June STRONG PERFORMANCE IN CORE CONSUMER CARE BUSINESS Highlights H1 H1 * Change Sales continuing operations 447.5m 464.1m -3.6% - Consumer Care 237.1m 203.4m +16.6% - Industrial Specialities 210.4m 260.7m -19.3% Operating profit/(loss) - continuing operations 51.0m 59.2m -13.9% - Consumer Care 53.4m 44.0m +21.4% - Industrial Specialities ( 2.4m) 15.2m n/a Profit before tax and exceptionals - Continuing 43.6m 50.6m -13.8% - Including discontinued activities 40.6m 57.6m -29.5% EPS continuing operations 20.8p 24.5p -15.1% Dividend per share 6.5p 6.2p +4.8% * Re-presented for disposals Record results from the Consumer Care division. Impact of fall in glycerine prices and significant year-on-year declines in Industrial Specialities depressed overall performance although this division is now showing signs of recovery by breaking even in the second quarter and recording a profit in June. Cash flow strong, contributing 22.0m to a reduction of 47.0m in net debt to 351.1m. Positive exchange differences of 25.0m made up the balance. Announced closure of two UK production sites Bromborough in Merseyside and Wilton on Teeside creating cost savings of at least 5m per annum from 2010 Commenting on the results Martin Flower, Chairman, said: Our core Consumer Care business continues to demonstrate resilience with another period of strong growth in sales, profits and margins. The Group s strategy is to continue to capitalise on the compelling opportunities for future growth and drive further progress in this division. While the Industrial Specialities business has been hit hard by the recession, there are now signs of a recovery in demand. We expect this improvement to continue with a return to profitability in the second. For these reasons, combined with the benefits coming through from our initiatives to reduce costs and generate cash, we are confident of making good progress in the rest of the year.

2 Croda International Plc Interim results for the six months to 30 June Continuing turnover declined 3.6% to 447.5m (: 464.1m) despite our core Consumer Care business delivering record results. This decline was as a result of the performance of the Industrial Specialities sector where sales are still well down on last year although demand has now started to improve. Sterling strengthened versus the year end position compared to the Dollar and Euro but on average was still weaker than the rates seen in the first of, giving a 16.2% currency translation benefit for the period. The year on year effect of last year s price increases and favourable mix boosted the average selling price per tonne by 3.1%. Continuing volumes declined by 22.9% overall as a result of the global recession, though we have seen a steadily improving monthly trend since the year end. Continuing operating profit decreased by 13.9% to 51.0m (: 59.2m), as the 21.4% growth in Consumer Care profit was outweighed by the losses incurred in Industrial Specialities. We saw a 6.6m year on year reduction in profitability from falling glycerine prices. Most of this shortfall occurred in Industrial Specialities. Pre-tax profit from continuing operations was down 13.8% at 43.6m (: 50.6m) helped by a lower interest charge due to reduced debt levels and lower interest rates. Earnings per share on continuing operations declined by 15.1% to 20.8p (: 24.5p), showing a similar trend to the pre tax profit decline but with a slightly higher tax charge than last year. Cash generation was strong, contributing 22.0m to a reduction of 47.0m in net debt despite the payment of the final dividend amounting to 18.3m in the period. Net debt reduced to 351.1m at 30 June with the cash flow augmented by favourable exchange differences worth 25.0m. Capital expenditure was in line with depreciation and we saw significant reductions in working capital, driven by an impressive 27.9m decrease in stock levels since the start of the year. Dividend We are increasing the interim dividend by 4.8% to 6.5p per share (: 6.2p) reflecting our confidence in the underlying strength of the business and the markets in which it operates. Divisional performance Following a change of management reporting lines, we have transferred our Home Care market reporting from Consumer Care to Industrial Specialities. All reported figures are on the new basis with comparatives restated.

3 Home Care turnover and profit in the first were as follows: Turnover 10.3m 10.0m Operating profit 0.7m 0.1m Consumer Care sales rose 16.6% to 237.1m (: 203.4m) and operating profit increased by 21.4% to 53.4m (: 44.0m) with return on sales increasing to 22.5% (: 21.6%). All markets saw sales and profit progress, though Crop Care growth slowed in the second quarter and basic fatty acid and glycerine sales into Consumer Care were well down. Health Care demand remained robust throughout the world. In Industrial Specialities, sales declined 19.3% to 210.4m (: 260.7m) and the division recorded a loss of 2.4m (: 15.2m profit). There were three main causes of this profit reduction: 1. Significant volume reductions in key industrial markets. 2. Adverse pricing for the by-product glycerine versus last year. 3. Entering the year with a stock of high priced raw materials as commodity prices were falling. We have seen a steady but modest increase in volumes throughout the period, though volumes are still well below the levels seen in the corresponding period of. Second quarter trading Continuing pre-tax profit at 21.9m (: 26.6m) in the second quarter was similar to that reported in the first quarter but trading trends were different. Consumer Care sales and profits were lower in the second quarter due to the timing of the Easter holidays, reduced Crop Care volumes (seasonality) and a lower currency translation benefit. Despite this, sales and profits were still ahead of very strong comparatives. Industrial Specialities broke even in the second quarter and returned to profit in June. This was still well down on but an encouraging improvement on the first quarter due to improving volumes, lower raw material pricing and overhead cost savings. Balance sheet The balance sheet remains strong with reduced debt levels. At 30 June, the Group had 442.4m of committed bank facilities plus a number of uncommitted credit lines. The majority of committed facilities run to June As a result of falling corporate bond rates, the IAS19 gross pension deficit has increased to 189.7m, more in line with recent actuarial valuations which were used to calculate the cash contributions to the fund. We expect the cash contributions to the pension fund over and above the charge in the profit and loss account to be no more than 10.0m in compared to 8.9m in. In the first this amounted to 3.8m (: 4.7m).

4 Site closures We have announced the closure of two UK production sites, Bromborough in Merseyside and Wilton on Teeside, the latter of which will transfer significant volumes to other Group operations and reduce overheads. We have also announced the closure of the shared services centre in Wilton and have restructured the production management teams across our two largest European sites. Total exceptional cash costs of the site closures will be around 23m though we would expect a benefit from a reduction in working capital of at least 10m. The majority of the cash outflow will occur in The ongoing benefit from these actions will be the elimination of Bromborough losses plus net cost savings from the closure of Wilton of at least 5m per annum from 2010 onwards. In addition to the cash costs, exceptional asset write downs of around 35m will be posted in the current year. As the closure of Wilton was announced after 30 June, its related closure costs will not be charged until the second. Outlook We have a robust business model, with growth in Consumer Care sales and profits, allied to strong margins. Industrial Specialities volumes are improving and the division is moving back into profit as we enter the second. We have demonstrated our continuing ability to generate cash and we have taken out significant costs across the Group. The business is well placed to benefit from the upturn in industrial end markets when it arrives and we are confident of making good progress in the rest of the year.

5 Statement of directors' responsibilities The directors' confirm that this condensed consolidated interim financial information is prepared in accordance with IAS 34 as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR and DTR The directors of Croda International Plc are listed in the Group's financial statements for the year ended 31 December, with the exception of the following changes in the period: Mr D M Dunn retired on 29 April, and Mr P N N Turner was appointed on 1 June. A list of current directors is maintained on the Croda website: By order of the Board Mike Humphrey Group Chief Executive Sean Christie Group Finance Director

6 Independent review report to Croda International Plc Introduction We have been engaged by the Company to review the condensed set of financial statements in the -yearly financial report for the six months ended 30 June, which comprises the Group income statement, Group statement of comprehensive income, Group balance sheet, Group statement of changes in equity, Group cash flow statement and related notes. We have read the other information contained in the -yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. Directors' responsibilities The -yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the -yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this -yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as adopted by the European Union. Our responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the -yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Scope of review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of interim financial information performed by the independent auditor of the entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the -yearly financial report for the six months ended 30 June is not prepared, in all material respects, in accordance with IAS 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. PricewaterhouseCoopers LLP Chartered Accountants Leeds 27 July

7 Group income statement * year* Before exceptional items Audited year* Exceptional items year* Unaudited Note Total Continuing operations Revenue Cost of sales (345.5) (352.6) (698.7) - (698.7) Gross profit Operating expenses (51.0) (52.3) (99.8) - (99.8) Operating profit Financial expenses 3 (8.1) (12.3) (25.5) - (25.5) Financial income Profit before tax Tax (15.3) (17.6) (31.5) - (31.5) Profit after tax from continuing operations Discontinued operations Non-exceptional (loss)/profit after tax (3.0) Exceptional loss after tax (34.2) (9.0) - (8.6) (8.6) 5 (37.2) (3.8) 5.0 (8.6) (3.6) (Loss)/profit for the period (8.9) (8.6) 61.2 Attributable to: Minority interest Equity shareholders (9.1) (8.9) pence per share pence per share pence per share pence per share (Loss)/earnings per share of 10p Basic Total (6.8) Continuing operations Diluted Total (6.8) Continuing operations Ordinary dividends Interim Final * re-presented for discontinued operations

8 Group statement of comprehensive income Unaudited Audited year (Loss)/profit for the period (8.9) Other comprehensive (expense)/income Currency translation differences (12.0) Movement in fair value of cash flow hedges (0.8) 1.2 (2.8) Actuarial movement on retirement benefit liabilities (net of deferred tax) (82.3) (18.1) (18.2) Total comprehensive (expense)/income for the period (104.0)

9 Group balance sheet Unaudited Note At 30 June At 30 June Audited At 31 December Assets Non-current assets Intangible assets Property, plant and equipment Investments Deferred tax assets Current assets Inventories Trade and other receivables Cash and cash equivalents Other financial assets Assets classified as held for sale Liabilities Current liabilities Trade and other payables (138.4) (214.0) (179.8) Borrowings and other financial liabilities 7 (60.6) (107.5) (87.2) Provisions (15.0) (10.1) (7.0) Current tax liabilities (15.4) (25.3) (10.2) (229.4) (356.9) (284.2) Net current assets Non-current liabilities Borrowings and other financial liabilities (339.7) (276.2) (355.6) Other payables (3.8) (3.3) (4.7) Retirement benefit liabilities (189.7) (80.4) (88.5) Provisions (35.5) (38.3) (41.5) Deferred tax liabilities (44.0) (43.2) (49.2) (612.7) (441.4) (539.5) Net assets Shareholders' equity Minority interest in equity Total equity

10 Group statement of changes in equity Unaudited Audited year Total equity at beginning of period (Loss)/profit for the period (9.1) Other comprehensive (expense)/income (94.6) (12.5) 5.1 Transactions with owners: Dividends on equity shares (18.3) (14.5) (22.9) Share based payments Consideration received for sale of own shares held in trust Total transactions with owners (16.7) (13.0) (20.8) Transactions with minority interests: Share of profit after tax Currency translation differences (0.5) Dividends paid to minority shareholders (0.3) (0.2) (0.2) Total minority interest transactions (0.6) (0.1) 0.3 Total equity at end of period

11 Group statement of cash flows Unaudited Note Audited year Cash flows from operating activities Continuing operations Operating profit Adjustments for: Depreciation and loss on disposal of fixed assets Changes in working capital 20.5 (15.2) (4.9) Pension fund contributions in excess of service cost (3.8) (4.7) (8.9) Share based payments Movement on provisions (6.0) (10.9) (16.7) Cash generated from continuing operations Discontinued operations (2.0) Interest paid (11.8) (13.1) (22.5) Tax paid (8.8) (15.6) (41.3) Net cash generated from operating activities Cash flows from investing activities Acquisition of subsidiaries - (1.8) (4.1) Purchase of property, plant and equipment 6 (18.9) (23.3) (51.9) Purchase of computer software - - (0.1) Proceeds from sale of property, plant and equipment Proceeds from sale of investments Proceeds from sale of businesses (net of costs) Cash paid against non-operating provisions (2.0) - (1.2) Interest received Net cash (used in)/generated from investing activities (17.3) 26.1 (5.5) Cash flows from financing activities Additional borrowings Repayment of borrowings (24.2) (29.4) (85.4) Net purchase of own shares Dividends paid 4 (18.6) (14.7) (23.1) Other - - (0.3) Net cash used in financing activities (20.9) (43.9) (40.7) Net movement in cash and cash equivalents Cash and cash equivalents brought forward Exchange differences (3.1) (1.4) 5.3 Cash and cash equivalents carried forward Cash and cash equivalents carried forward comprise: Cash at bank and in hand Bank overdrafts (12.3) (40.5) (25.0) A reconciliation of the cash flows above to the movement in net debt is shown in note 8.

12 Notes to the interim report 1. a) General information The Company is a public limited company (Plc) incorporated and domiciled in the UK. The Company is listed on the London Stock Exchange. This condensed consolidated interim report was approved for issue on 27 July. The financial information included in this interim financial report for the six months ended 30 June does not constitute statutory accounts as defined in section 434 of the Companies Act 2006 and is unaudited. The comparative information for the six months ended 30 June is also unaudited. The comparative figures for the year ended 31 December have been extracted from the Group's financial statements, as filed with the Registrar of Companies, on which the auditors gave an unqualified opinion and did not make a statement under section 237 of the Companies Act b) Basis of preparation This interim financial report has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and IAS 34 'Interim financial reporting' (as adopted by the EU). The report should be read in conjunction with the Group's financial statements for the year ending 31 December, which were prepared in accordance with IFRSs as adopted by the EU. c) Accounting policies The accounting policies adopted in preparing this report are consistent with those used in the Group's financial statements for the year ended 31 December as described in those statements. The following new standards, amendments to existing standards or interpretations are mandatory for the first time for financial years beginning on or after 1 January, and have been adopted by the Group effective from 1 January :- - IAS 1 (revised), 'Presentation of financial statements', The revised standard brings new disclosure requirements regarding 'non-owner changes in equity' and owner changes in equity, which are now required to be shown separately. Under this revised guidance the Group has elected to continue to present two performance statements: an income statement and a statement of comprehensive income (previously the 'Statement of Recognised Income and Expense'). The financial statements have been prepared under the revised disclosure requirements. - IFRS 8, 'Operating segments'. IFRS 8 replaces IAS 14, 'Segment reporting'. IFRS 8 requires a 'management approach' under which segment information is presented on the same basis as that used for internal reporting purposes. This has not resulted in a change to reported segments, which remain as Consumer Care and Industrial Specialities. The following new standards, amendments to standards and interpretations are mandatory for the first time for the financial year beginning 1 January, but do not have any impact on the Group - IFRIC 13 'Customer loyalty programmes', IFRIC 14 'The limit on a defined benefit asset, minimum funding requirements and their interaction', IFRIC 15 'Agreements for the construction of real estate', IFRIC 16 'Hedges of a net investment in a foreign operation', IAS 39 (amendment) 'Financial instruments: Recognition and measurement', IFRS 2 (amendment) 'Share based payments - vesting conditions and cancellations', IAS 23 (revised), 'Borrowing costs', IAS 27 (revised) 'Consolidated and separate financial statements', IAS 32 and IAS 1 (amendment) 'Puttable financial instruments and obligations arising on liquidation'. The following amendment to a standard is expected to have a disclosure only impact on the financial statements for the year ending 31 December - IFRS 7 (amendment) 'Financial instruments: Disclosures'. 2. Segmental information At 30 June the Group is organised on a worldwide basis into two main business segments, relating to the manufacture and sale of the Group's products which are destined for either the Consumer Care market or the market for Industrial Specialities. These are the segments for which summary management information is presented to the Finance Committee and Executive Committee, which is deemed to be the Group's chief operating decision maker.

13 2. Segmental information (continued) Income statement * year* Revenue - continuing operations Consumer Care Industrial Specialities Operating profit/(loss) - continuing operations Consumer Care Industrial Specialities (2.4) There is no material trade between segments. All operating costs of the Group are allocated between the segments. Total assets Segment total assets: Consumer Care Industrial Specialities Total segment assets Goodwill (excluding software) Assets classified as held for sale Tax assets Cash, other financial assets and other investments , ,089.0 * Re-presented for discontinued operations 3. Net financial expenses year Financial expenses Bank interest payable Expected interest on pension scheme liabilities less return on scheme assets Financial income Bank interest receivable (0.7) (0.4) (2.1) Expected return on pension scheme assets less interest on scheme liabilities - (3.3) (7.1) (0.7) (3.7) (9.2) Net financial expenses

14 4. Dividends paid Pence per share year Ordinary 2007 Final - paid June Interim - paid October Final - paid June Preference (paid June and December) Dividends paid to minority shareholders An interim dividend in respect of of 6.50p, amounting to a total dividend of 8.8m, was declared by the directors at their meeting on 27 July. This interim report does not reflect the interim dividend payable. The dividend will be paid on 8 October to shareholders registered on 4 September. 5. Discontinued operations In April, continuing its strategy to reduce exposure to basic commodity sectors, the Group announced the closure of its operations at Bromborough in Merseyside, United Kingdom. During, the Group sold its 46.5% stake in its associate, Baxenden Chemicals Capital Limited, to Chemtura Corporation for 13m and its Chicago Oleochemicals business was sold to H.I.G. Capital LLC for 46.8m. year Operating (loss)/profit of discontinued operations (3.0) Income from disposed associate Loss on disposal and closure of discontinued operations (37.8) (10.3) (9.9) Tax 3.6 (0.5) (0.5) Total loss after tax from discontinued operations (37.2) (3.8) (3.6) 6. Property, plant and equipment year Opening net book amount Exchange differences (37.8) Additions Business disposals and closures (29.9) (38.4) (39.1) Other disposals and write offs (0.1) (0.1) (3.0) Depreciation charge for period (17.7) (15.4) (32.8) Closing net book amount At 30 June the Group had contracted capital expenditure commitments of 6.1m (: 10.8m). 7. Financial assets and liabilities During 2006 the Group took out additional interest rate swaps to fix a proportion of the floating rate acquisition funding, these swaps are being designated as cash flow hedges. Under IFRS the fair value of such derivative instruments must be recognised in the financial statements. Accordingly, a financial liability of 3.2m (30 June : asset of 1.6m) has been recognised within current liabilities (30 June : current assets), being the fair value of the interest rate swaps designated as cash flow hedges, with a corresponding adjustment to equity.

15 8. Reconciliation to net debt year Net movement in cash and cash equivalents Movement in debt and lease financing Change in net debt from cash flows New finance lease contracts - - (0.6) Exchange differences 25.0 (6.8) (60.5) (32.1) Net debt brought forward (398.1) (366.0) (366.0) Net debt carried forward (351.1) (341.6) (398.1) 9. Post balance sheet events On 8 July the Group announced the closure of its operations at Wilton on Teeside, United Kingdom. Expected cash closure costs of approximately 13m and a relatively small asset write-off of around 5m will be charged in the second of the year. 10. Accounting estimates and judgements The Group's critical accounting policies under IFRS have been set by management with the approval of the Audit Committee. The application of these policies requires estimates and assumption to be made concerning the future and judgements to be made on the applicability of policies to particular situations. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Under IFRS an estimate or judgement may be considered critical if it involves matters that are highly uncertain, or where difference estimation methods could reasonably have been used, or if changes in the estimate that would have a material impact on the Group's results are likely to occur from period to period. The critical judgements required when preparing the Group's accounts are as follows: (i) Provisions - the Group has made significant provision for potential environmental liabilities and for the costs of the restructuring exercise following the acquisition of Uniqema. The environmental provision relates to soil and potential ground water contamination on a number of sites, both currently in use and previously occupied, in Europe and the Americas. Restructuring provisions relate to the ongoing plans to integrate the acquired Uniqema business with the existing Croda businesses. Provisions are made where a constructive or legal obligation can be quantified and where the timing of the transfer of economic benefits relating to the provisions cannot be ascertained with any degree of certainty. In relation to the environmental provision, the directors consider that the balance will be utilised within 20 years. With regard to the restructuring provisions, significant elements have been utilised to date and the directors' view is that there will be further elements that will be utilised in the remainder of with the balance largely utilised by Based on information currently available and on the detailed plans established for the restructuring of the Group, this level of provision is considered appropriate by the directors. Following an announcement in April, the Group made a 10m provision for closure costs at its Bromborough site. (ii) Goodwill and fair value of assets acquired - the Group's goodwill carrying value increased significantly in 2006 following the acquisition of Uniqema. The Group tests annually whether goodwill has suffered any impairment and the Group's goodwill value has been supported by detailed value-in-use calculations relating to the recoverable amounts of the underlying cash generating units. These calculations require the use of estimates, however recoverable amounts as calculated at the end of last year far exceed carrying value, including goodwill and as there has been no indication thus far this year of subsequent impairment, there is no sensitivity with regard to impairment. (iii) Retirement benefit liabilities - the Group's principal retirement benefit schemes are of the defined benefit type. Recognition of the liabilities under these schemes and the valuation of assets held to fund these liabilities require a number of significant assumptions to be made, relating to levels of scheme membership, key financial market indicators such as inflation and expectations on future salary growth and asset returns. These assumptions are made by the Group in conjunction with the schemes' actuaries and the directors are of the view that any estimation should be prudent and in line with consensus opinion. As a result of falling bond rates, the IAS 19 gross pension deficit at 30 June has increased to 189.7m.

16 11. Principal risks Each division considers strategic, operational and financial risks and identifies actions to mitigate those risks. These risk profiles are updated at least annually. The principal risks and uncertainties for the remaining six months of the financial year are the same risks and uncertainties referred to and discussed in the Group's most recent Annual Report, which can be found at These risks remain as; a major site event, loss of key personnel, interruption of raw material supply, major environmental incident, product liability, regulatory compliance, IT failure, management of pension fund assets and working capital management. 12. Related party transactions The Group has not entered into any material transactions with related parties in the first six months of the year. Supplementary analysis of continuing operations restated for discontinued operations and Home Care move 30 June unaudited Turnover trends Q1 Q2 H1 Average price + 8.0% - 1.7% + 3.1% Volume % % % Underlying % % % Currency % % % Continuing sales + 1.9% - 8.8% - 3.6% Turnover Q1 Q2 H1 Consumer Care Industrial Specialities Profits Consumer Care Industrial Specialities (2.4) - (2.4) Operating Profit Interest (4.6) (2.8) (7.4) Profit before tax Turnover H1 H2 Year Consumer Care Industrial Specialities Profits Consumer Care Industrial Specialities Operating Profit Interest (8.6) (7.7) (16.3) Profit before tax

17 Turnover Q1 Q2 Q3 Q4 Year Consumer Care Industrial Specialities Profits Consumer Care Industrial Specialities Operating Profit Interest (4.2) (4.4) (3.8) (3.9) (16.3) Profit before tax