Profits fall 33% for Goole chemicals firm after weak demand in 2023

The announcement comes after the firm issued a profit warning in October.

Steve Foots, chief executive officer of Croda International, said: "Our performance this year reflects the prolonged destocking and weaker macro environment that has followed two record years post the pandemic.

“Despite the financial impact of this ongoing uncertainty, the technology trends that will drive our future growth have not changed with a continued transition to sustainable ingredients and biologics. We have successfully realigned our portfolio with these megatrends and our strategy is delivering with continued customer demand for innovation and sustainable ingredients.”

"With our strong balance sheet, improving cash flow and consistent investment in our refocused portfolio, Croda is well positioned to take advantage of the demand recovery when it occurs. We expect the Group's performance to accelerate from 2025, generating continued increasing returns for our shareholders."

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Adjusted operating margin was down from 25 per cent to 18.9 per cent for the firm. Croda International said that this was due to the “negative operating gearing impact from lower sales volumes, lower Covid-19 lipid sales and the negative mix impact of strong F&F sales.”

The firm reported a £162.9m improvement in working capital, with free cash flow up 5 per cent to £165.5m.

In February of last year, Croda International announced that it had successfully completed the acquisition of South Korea-based Solus Biotech, a manufacturer of active ingredients for beauty care and pharmaceuticals.

Mr Foots added: “Despite the challenging macroeconomic backdrop, we have continued to invest for the future, adding biotech-derived active ingredients to our portfolio through our acquisition of Solus Biotech and expanding capacity in Pharma whilst maintaining strict capital and cost discipline.”

Consumer Care sales were down 1 per cent for the firm, with underlying sales down 11 per cent in Beauty Care, 1 per cent in Beauty Actives and Home Care, and up 18 per cent in the company’s lower-margin F&F business. Life Sciences sales were also down 5 per cent for the firm, excluding Covid-19 lipid sales, with sales up 3 per cent in Pharma on that basis, and up 9 per cent in Seed Enhancement.