Croda sees minimal impact from virus
Deal sees acquisition of French firm
BUSINESS: Speciality chemicals firm Croda hailed “a very resilient performance” as it had a “minimal impact” from the coronavirus outbreak for the year ended December 31, 2020.
The Snaith-based business reported sales of £1.39bn, up less than one per cent from £1.37bn the previous year. Operating profit fell by 9.3 per cent.
SPECIALTY CHEMICALS firm Croda hailed “a very resilient performance” as it had a “minimal impact” from the coronavirus outbreak for the year ended December 31, 2020.
The Snaith-based business reported sales of £1.39bn, up less than one per cent from £1.37bn the previous year. Operating profit fell by 9.3 per cent from £319.9m to £290m.
Croda also announced the acquisition of the worldwide business activities of a supplier of natural and botanical ingredients to the global beauty industry for €25m.
The East Yorkshire firm has expanded its portfolio of sustainable active ingredients for customers in personal care markets with the deal for Alban Muller, which is based in France and had an annual revenue of €18m for the year to June 30, 2020.
Steve Foots, CEO of Croda, told The Yorkshire Post: “It’s been a very resilient performance from the group. We’ve had minimal financial impact from Covid-19, which is a testimony to the hard work from everybody in the organisation around the world.
“They’ve worked brilliantly as one Croda team to keep the show on the road. We got back to growth in the second half of the year and growth accelerated in the quarter four.”
Mr Foots said that its personal care division had suffered from the headwind of lockdowns but that there has been “a sequential improvement month-on-month from May last year”.
He added: “People haven’t been able to go out so the out-of-home cosmetics have been disrupted – particularly at the luxury end of the market.
“People haven’t been able to go out to shop, to travel, to go on holidays and also to go to professional salons. All of that has been a headwind and as lockdowns start to moderate we’re starting to see the personal care business come back.”
The deal for Alban Muller is a “small acquisition for Croda in relative terms”, says Mr Foots, but an important one for its actives business.
He added: “There’s a big market trend moving towards 100 per cent sustainable ingredients.
“This is an ideal acquisition. It’s a French acquisition and there’s lots of good growth synergies and cost synergies in the business with our other French businesses of Sederma and Crodarom.”
The chief executive of Croda believes that there will be an acceleration in sustainability trends post-Covid with consumers wanting more bio-based ingredients in their formulations.
Mr Foots said: “They want their product sourced from ethical sourcing. They want them to be manufactured sustainably with lower carbon emissions.
“They want far more transparency about what’s in the ingredients rather than what’s just in the finished product. We see more opportunities as a consequence of this. We’re placed well because 67 per cent of our raw materials are from renewable ingredients.”
The East Yorkshire firm has made nearly £1bn worth of investment in the past year adding over more that 1,000 people in the last six months.
Mr Foots said: “I’ve worked for Croda for 30 years and I’ve seen six economic downturns and we always make incredible progress in a recessionary year. We’ve always done that and here again we have invested around £1bn in some really encouraging projects.”