Symrise Raises Full-year Guidance
PARIS — Symrise AG reported its net profits advanced 16.6 percent on sales that grew 18.5 percent in the first half of 2022. Due to the strong results, the German fragrance and flavors supplier has raised its sales forecast for the full year.
“In a volatile business environment caused by rising commodity prices, ongoing global supply bottlenecks and the Russia-Ukraine war, we managed to continue on our profitable growth course,” said Heinz-Jürgen Bertram, chief executive officer of Symrise, in a statement. “We achieved this by relying on our robust business model, diversified application portfolio and broad regional presence and customer base.
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“Demand increased significantly in many areas,” he continued. “Customers have particularly increased their demand for applications for cosmetics, fine fragrances and pet food. Solutions for beverages and food have also performed very well and considerably contributed to the double-digit organic growth.”
The organic uptick for the Holzminden, Germany-based company’s sales of 2.26 billion euros was 10.2 percent in the six months ended June 30.
Symrise’s Scent and Care segment posted sales of 862.9 million euros, up 15.2 percent in reported terms and 6.3 percent on an organic basis. The Fragrance division’s sales advanced by a single-digit percentage, while the Fine Fragrance business achieved a double-digit sales increase in organic terms. Divisional growth rates were noted in the Europe, Africa and Middle East, or EAME, zone and Latin America.
The Consumer Fragrance unit’s sales were dented by a lower demand for hygiene and cleaning products than in the first half of 2021. Concurrently, sales of solutions for household products rose, while the Oral Care business had “subdued” sales, according to Symrise.
“The EAME region failed to match the good level of the previous year,” it said.
The Aroma Molecules division posted high-single-digit organic sales gains. The Cosmetics Ingredients branch registered a double-digit percentage organic sales increase, boosted by upticks in all regions, led by EAME and Latin America.
Symrise’s Taste, Nutrition and Health segment reported sales growth of 15.2 percent to 862.9 million euros.
“In light of the dynamic business development, we have raised our sales forecast and are now targeting organic sales growth of significantly above 7 percent for the current fiscal year,” Bertram said. “While commodity and energy prices continue to increase, we want to maintain profitability at a high level with an EBITDA margin of around 21 percent.”
In late April, Symrise had confirmed its organic sales growth target for the current fiscal year of 5 percent to 7 percent, with an expected earnings before interest, taxes, depreciation and amortization margin of approximately 21 percent.
The company’s EBITDA was 486 million euros, up 15.7 percent, thanks to profitable sales growth and portfolio effects. The EBITDA margin declined 0.5 percentage points, due primarily to increased raw material costs and higher operating costs.
The group’s net profit reached 228.8 million euros. Symrise said the consequences of the coronavirus health crisis and war in Ukraine have impacted the company’s business development “only to a minor degree.”
“The disruption of supply chains and the availability of raw materials have exerted a noticeable impact on the procurement markets and have led to price increases for raw materials, some of which at a significant level,” Symrise said. “The sharp rise in inflation in recent months has led to further cost increases at Symrise. The company is countering this development by consistently increasing prices for its own customers.”
Symrise said it is focusing on organic as well as inorganic growth — through acquisitions — and maintaining cost-awareness.
For the mid-term, the group aims to raise its sales to 5.5 billion euros to 6 billion euros by 2025, in part by a compound annual growth rate of 5 percent to 7 percent and acquisitions. Symrise expects EBITDA margin of 20 percent to 23 percent in the long term.
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