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Symrise reports 7.5% organic growth

14 May 2018

Symrise has announced that it remains on track for strong growth in the fiscal year 2018 and achieved a 7.5 % organic increase in sales in the first quarter.

Symrise has announced that it remains on track for strong growth in the fiscal year 2018 and achieved a 7.5 % organic increase in sales in the first quarter. All segments benefited from good demand. Taking into account portfolio and exchange rate effects, sales in the first quarter were up 1.5% to €776.9 million (Q1 2017: €765.2 million). Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to €155.8 million. Due to negative currency effects and higher raw material costs, it came in lower than in the prior-year period (Q1 2017: €165.5 million). The EBITDA margin reached 20.1 % and was within the medium-term target corridor of 19–22 %.

"We have made a dynamic start in the fiscal year 2018 and consider ourselves very well positioned due to our strong market position. Despite extensive investments, volatile exchange rates and higher raw material prices, we operated very profitable," said Dr. Heinz-Jürgen Bertram, CEO of Symrise AG. "The targeted expansion of our product portfolio and our raw material base has paid off. Along with strong demand from our customers, this was the foundation of our success in the first quarter. All segments generated substantial new business and contributed to the growth of our Group. We are looking ahead with confidence to our business performance in the coming months. We will remain focused on profitable growth, especially through our continuing push to expand our capacity."

Sales in the Flavor segment, which encompasses the business activities with flavours for foods and beverages, grew organically in the first quarter at a very dynamic rate of 11.0 %. All business units and regions showed significant increases in sales. Taking into account exchange rate effects and the Cobell acquisition, sales in this segment were up 7.8 % in reporting currency in the first quarter to € 291.2 million (Q1 2017: € 270.2 million).

In the EAME region, applications for sweet and savoury products delivered the biggest organic increases, above all in the national markets of Germany, France, Russia and Egypt. The Beverages business unit benefited from the Cobell acquisition.

The Asia/Pacific region achieved in all business units high single-digit or even double-digit percentage growth rates, with particularly satisfactory results especially in China, Japan and Singapore.

The North America region also saw significant year-on-year gains in sales. The Beverages application area showed a particularly dynamic trend resulting from extensive new business.

The overall trend in the Latin America region was positive, with an organic growth rate in the medium single-digit percentage range. The biggest impetus came from the Sweet business unit, with good demand in the markets of Brazil and Mexico.

In the Flavor segment, EBITDA increased to € 61.0 million. This result was € 4.1 million higher than in the same period a year earlier (Q1 2017: € 56.9 million) despite unfavorable exchange rates, and represents an increase of 7.2 %. The EBITDA margin, at 20.9 %, was down slightly (Q1 2017: 21.1 %), mainly as a result of the Cobell acquisition.

The Nutrition segment, which includes the Diana division, with food, pet food and baby food applications as well as probiotics, achieved organic growth of 2.9 % in the first quarter. This reflects above all an announced reduction in orders from a relevant probiotics customer. Adjusted for the business unit Probi, the growth rate was 8.0 %. In consideration of unfavorable exchange rates, sales in reporting currency, at € 153.8 million, were lower than in the same period in 2017 (Q1 2017: € 161.8 million).

Symrise affirmd its growth and profitability targets for the current fiscal year. The Group remains confident that it will continue to achieve growth on a sustainable basis. The target remains, again in 2018, to significantly exceed the market growth rate, which estimates indicate will lie between 3% and 4%.

Symrise aims to be highly profitable yet again in 2018 and to achieve an EBITDA margin of approximately 20%. The medium-term targets through to the end of the fiscal year 2020 remain in effect, including a compound annual growth rate (CAGR) in the 5–7% range and an EBITDA margin between 19–22 %.