Adjusted profit before tax increased 5.4% to £251.4m despite demanding market conditions.
Strong sales growth of 10.8% in new and protected products (NPP) supported a record return on sales in both Consumer Care (32.2%) and Performance Technologies (16.3%). Profits were flat in Industrial Chemicals.
The improved product mix helped to increase the Group's return on sales to 24.6% (2012: 24.3%).
Two acquisitions added valuable new technologies and further expanded our geographical footprint:
o Acquired specialty product business from Arizona Chemical in May;
o Acquired 65% stake in Sichuan Sipo (China) in August.
Very strong cash generation, free cash flow of £249.0m (2012: £180.5m).
Full year dividend increased by 8.4% to 64.5p
Commenting on these results, Chairman Martin Flower said:
"In another year of demanding market conditions, Croda continued its track record of pre-tax profit and earnings per share growth. From a strategic perspective, we have made real progress, maintaining our focus on innovation and developing our business in both existing and emerging markets. With record sales of new and protected products across the business, acquisitions in North America and China, three more R&D laboratories, two more customer training centres and further investment in our global sales force, our platform for sustainable, organic growth is much stronger.
While the current year has started in line with our expectations, global trends are unpredictable and our forward visibility remains limited. Currency translation is expected to have an adverse impact on profit growth in 2014. If last year's results had been translated using closing rates as at December 2013, pre-tax profits for 2013 would have been approximately £9m lower. However, we still expect to achieve constant currency sales and profit growth in 2014 characterised by:
- Improvement in margins in Performance Technologies, progressing towards our target of 20% return on sales
- NPP sales growth
- Strong cash generation
The Board is confident that Croda has the right strategy in place to deliver its medium term growth targets."