Specialty chemicals group Croda has reported a 3.9% fall in sales to £1.6bn in 2024, after citing a “subdued demand environment”.

The company, reporting its annual results for the year to 31 December, also recorded an 8.1% fall in operating profit to post £227.5m for the year.

Croda described 2024 as a “transitional year” that followed two years of “unprecedented demand” in 2021 and 2022, before an industry-wide reset from 2023.

CEO, Steve Foots, said the group’s life sciences business was impacted by the absence of COVID lipids and weak sales into consumer health markets, although better demand in its crop protection business helped to drive an improved performance in H2.

“Whilst sales growth was lower than we hoped in a subdued demand environment, proactive actions to rebase costs and drive efficiencies enabled us to deliver profits in line with our guidance,” Foot said.

“We are accelerating our efforts with an enhanced focus on costs and efficiency which, combined with increased innovation and the growth potential of recent investments, underpin our confidence in delivering earnings growth and improving returns in the future.”

With sales volumes higher in 2024 and price headwinds “likely to diminish”, Croda also said, it is expecting both its consumer care and life sciences sectors to grow sales in 2025.

For the coming year, the group is expecting an adjusted profit before tax between £265m and £295m at constant currency.

Reacting to Croda’s results, head of equity research at Hargreaves Lansdown, Derren Nathan, added: “The company’s focus on innovation leaves it in a better place than some of its peers as does its broad manufacturing footprint. A pivot towards local and regional customers should leave it less exposed to any further escalation in international trade restrictions.

“Croda appears to be overcoming some of its recent challenges and its product portfolio leans into some exciting long-term megatrends. But a more sustained growth trajectory is required to provide a meaningful catalyst that can boost investor sentiment.”

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