Symrise achieves strong growth
The company continued its dynamic business development in the first half of 2019. All segments benefited from higher customer demand and 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 an impressive 7.4 % to € 1,692 million (H1 2018: € 1,576 million). 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).
All segments increased sales
“After a dynamic start to the year, we continued our growth and further expanded our business,” said the CEO of Symrise AG, 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. The company 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.”Symrise achieved dynamic organic sales growth of 6.2 % in the first half of 2019. All segments benefited from good demand. Including exchange rate effects, consolidated revenues increased by an impressive 7.4 %.
The Scent & Care segment
Scent & Care realized strong organic sales growth of 6.3 % in the first half of 2019. After a dynamic first quarter, the very positive sales performance continued in the second quarter. Taking currency translation effects into account, sales in the first six months were € 712 million, up 7.8 % over the same period of the previous year (H1 2018: € 660 million). Sales in the Cosmetic Ingredients division grew by a single-digit percentage, driven by the North America and Asia/Pacific regions. The national markets in the USA and China developed particularly dynamically. The Aroma Molecules division recorded satisfactory organic growth. The Menthols business unit achieved above-average growth in Latin America, and the Fine Aroma Chemicals business unit performed likewise in the EAME and Asia/Pacific regions. The Fragrance division achieved a double-digit percentage increase in organic sales. Growth drivers were the Consumer Fragrances and Fine Fragrances business units. In the Consumer Fragrances business unit, growth in Asia/Pacific and North America was particularly high, especially in India and the USA. The Fine Fragrances business unit significantly increased sales in the North American and EAME regions. The Oral Care business unit grew in the low single-digit percentage range and achieved the highest growth in the Asia/Pacific region. Scent & Care improved EBITDA by 9.7 % to € 140 million in the first half of 2019 (H1 2018: € 128 million). The segment’s EBITDA margin was 19.7 % and was despite persistently high raw material costs above the previous year’s level (19.4 %).
Outlook: Targets confirmed, and profitability specified
Following the dynamic business development in the first six months, the company 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 4 % 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 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.
At the beginning of the year, Symrise presented its long-term targets. They underpin the company’s ambitions and now extend to the end of fiscal year 2025. Symrise intends to increase sales to about € 5.5 to 6.0 billion by then. This increase is to be achieved through annual organic growth of 5 to 7 % (CAGR) as well as additional targeted acquisitions.