13/03/2019 | Ingredients

Symrise successfully continues profitable growth course in 2018

Symrise AG, Holzminden, took full advantage of its growth opportunities in 2018 and successfully overcame headwinds resulting from external factors. Taking into account portfolio and exchange rate effects, sales increased by 5.3 % to € 3.15 bn (2017: € 23 bn). On organic basis, sales growth even amounted to 8.8 %, exceeding the increased guidance issued in late fall.

This outstanding performance was carried by all segments and regions. Despite targeted investments in increased capacity at locations in China and the USA and negative effects from exchange rates and raw material costs, Symrise retained its earnings power. The Group achieved earnings before interest, taxes, depreciation and amortization (EBITDA) of € 631 m (2017: € 630 m). With an EBITDA margin of 20.0 %, profitability remained healthy and within the target corridor of 19–22 %.

"In 2018 we seamlessly continued our success story. Symrise again grew profitably and outperformed the market. We identified and successfully capitalized on growth opportunities in every business segment. We also invested in future growth and added to our capacity. Although we were not able to counteract all of the headwinds caused by high raw material prices and negative currency effects, we still operated with a healthy profitability. We want our shareholders to participate in this success. At the Annual General Meeting, the Executive Board and Supervisory Board will propose a dividend increase to € 0.90 per share for the fiscal year 2018," said Dr. Heinz-Jürgen Bertram, CEO of Symrise AG.

Symrise again grew significantly faster than the relevant market for fragrances and flavors, where growth in 2018 was in the 3–4% range. Dynamic trend in Latin America and Asia/Pacific The growth driver at regional level was once again Latin America with an outstanding double-digit organic growth rate of 16.2 %. Business in the EAME and North America regions developed also highly positively, with an organic increase of 6.4 % and 6.1 %, respectively. In the Asia/Pacific region, Symrise achieved strong organic sales growth of 12.4 %. Overall organic sales growth in the dynamically expanding Emerging Markets reached 11.7 %. In these fast-developing markets,

The Flavor segment experienced strong organic growth of 9.5 %, with sales increasing to € 1.2 bn (2017: € 1.1 bn). Taking currency effects into account and the portfolio effect from the Cobell acquisition, sales in the segment grew by 8.1 % in reporting currency. All regions and application areas contributed to this positive development. Flavor benefited in particular from strong demand in the EAME region, which achieved impressive double-digit growth. Growth was driven furthermore by applications for sweets and beverage products. The Nutrition segment increased organic sales in the past fiscal year by 7.4 % to € 639 m (2017: € 631 m). In the reporting currency, including portfolio and currency effects, the segment grew by 1.2 %. The strongest impetus came from the Pet Food application area. The Food application area also performed well with double-digit growth. In the year under review, Nutrition achieved an EBITDA of € 132 million (2017: € 139 million). The decline in earnings compared with the previous year is attributable to two factors: Investments in the new Diana Food location in the USA and a lower contribution to earnings from Probi due to a temporary inventory decrease by a major customer in the first half of the year.

Symrise is looking ahead to the current fiscal year with confidence. The Group again aims to exceed the overall growth rates in the relevant market. The market is projected to grow at a rate of 3–4 % worldwide. In addition, Symrise is targeting an EBITDA margin of around 20 % despite the anticipated economic slowdown, ongoing volatility in exchange rates and a tight market for raw materials. Overall, with its global presence, diversified portfolio and broad client base, Symrise believes it is well positioned to achieve these goals. With strategic investments, the company group plans to continue its expansion in high-growth, high-margin business segments. Against the background of the tense situation on the raw material markets, the expansion of its own backward integration will continue to play a key role in the future. In addition, long-term contracts and close cooperation with producers will secure Symrise's access to high-quality raw materials.