Symrise reports continuing business growth

15 Aug 2019

Symrise has reported that all its business segments benefited from higher customer demand and the company realized a pleasing increase in sales.

Across the group, Symrise increased organic sales in the first half of the year by 6.2%. Accounting for currency translation effects, group sales increased by 7.4% to €1,692 million (H1 2018: €1,576 million).

Symrise reports continuing business growth

Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to €342 million and therefore was up 7.7% over the previous year’s level (H1 2018: €317 million). Adjusted for the one-time effects related to the planned acquisition of ADF/IDF, EBITDA(N) amounted to €351 million, exceeding the previous year’s figure by €34 million. The profitability of the group remained at a high level with an EBITDA(N) margin of 20.8% (H1 2018: 20.1%). As a result of the new IFRS 16 standard, EBITDA(N) increased by €9.8 million in the first half of 2019. The normalized net income for the period of €153 million exceeded the previous year’s level by 7.8% (H1 2018: €142 million).

“After a dynamic start to the year, we continued our growth and further expanded our business,” said CEO Dr. Heinz-Jürgen Bertram. “All segments increased sales and contributed to the Group’s growth. This positive development is accompanied by continued good demand from our customers. That is why we are looking ahead to the coming months with confidence, even if the economic prospects are slowing down in some regions of the world. Symrise has proven in the past that our business remains very robust even in such times. We therefore stand by our annual goals as well as our long-term ambitions. These goals include annual organic sales growth of 5–7 % on average by 2025.”

In the first half of 2019, Symrise’s Flavour Segment achieved organic sales growth of 3.7% over very high comparable figures from the previous year. The Savoury business unit and the Asia/Pacific and EAME regions significantly increased sales. In the Sweet business unit, the increase in sales was modest after the high level of momentum in the previous year. Accounting for currency translation effects, the segment’s sales in the reporting currency grew by 5.4% to €637 million (H1 2018: €605 million).

In the EAME region, the Flavour segment realized single-digit organic growth rates. Significant growth stimuli came from applications for savoury products in Russia and the Middle East.

The Asia/Pacific region recorded double-digit growth rates in the Beverage and Savoury products application areas. The markets of Indonesia, Malaysia, Thailand and Vietnam developed particularly well.

Latin America also was also dynamic and achieved double-digit organic growth. The application areas for savoury and sweet goods did particularly well in Brazil, achieving double-digit growth.

In North America, sales growth was in the single digits. In particular, the savoury products application area developed positively.

The EBITDA of the Flavour segment amounted to €144 million in the reporting period (H1 2018: €127 million), and grew 13.6% compared to the prior year’s figure. The EBITDA margin improved from 21.0% in the first half of the previous year to 22.6% in the current fiscal year. This was mainly due to proportionally lower raw material costs.

Nutrition achieved strong organic growth of 11% in the first half of 2019. Accounting for currency translation effects, sales in the reporting currency amounted to €343 million and were 10.5% above the previous year’s level (H1 2018: €311 million).

In the Food business unit, the regions of Asia/Pacific and Latin America posted double-digit growth, especially in China, Australia and Mexico. Sales in the EAME and North America regions fell slightly.

Sales also developed well in the Aqua business unit. Important new business was gained here, especially in the EAME region.

Probi achieved double-digit sales growth during the reporting period. The regions of EAME and North America showed particularly good growth. In Europe, numerous new business wins were realized, and a large customer’s business stabilized in North America.

The Nutrition segment generated an EBITDA(N) of €67 million in the first half of 2019 (H1 2018 EBITDA: €62 million). The segment’s EBITDA(N) margin reached 19.5%, which was below the prior-year period (H1 2018 EBITDA margin: 20.0%). The slight decrease in margin was mainly due to production delays at Diana Food’s new site in North America and increased raw material costs at Diana Pet Food.

Following the dynamic business development in the first six months, Symrise continues to expect sales growth of 5 to 7% for the current fiscal year. The target is once again to significantly exceed the growth of the relevant market in 2019, which is estimated to grow by 3 to % worldwide. In addition, Symrise is now targeting an EBITDA(N) margin of around 21% (including IFRS 16) despite the expected economic slowdown, persistently volatile exchange rates and tight raw material prices.

Overall, the group believes it is very well positioned to achieve its targets with its global presence, diverse portfolio and broad customer base. Against the background of rising demand for important raw materials, the expansion of our own backward integration will continue to play an important role.