Emerging markets boost Symrise results

By Jess Halliday

- Last updated on GMT

Related tags: Cent, Revenue, Symrise

Newly industrialised countries contributed over-the-odds to a
strong growth story for Symrise's Q3, particularly in flavours and
nutrition.

The German flavours and fragrance firm has reported that so far this year it has achieved a higher share of its sales (40 per cent) in emerging markets than in Western Europe. Particularly strong growth was seen in China, Indonesia and Korea - three of the places that the firm has focused on as being high potential. Overall, sales for Q3 were up 5 per cent to €328m over last year's comparative period, and nine month sales were up 4.7 per cent to €989.2m. EBITDA rose 9.4 per cent to €75.2m in Q3, and 13.9 per cent to €219m over the nine months. In flavours and nutrition Q3 saw a 2 per cent increase to €156.2m, and 3.4 per cent over the nine months to €467.4m. "Flavor & Nutrition generates a larger proportion of its sales in the fast-growing emerging markets than in Western Europe,"​ said CEO Dr Gerold Linzbach. "This means Symrise is very definitely a globally positioned company." Moreover, the company has been investing in emerging economies. In August it announced a dramatic expansion of its regional Sensory and Consumer Science Center in Singapore, aimed at understanding how best to cater to consumers who are rapidly adapting to Western eating habits but who also adhere to local twists in taste and other preferences. ​Symrise has parallel regional centres for Europe, Asia and the Middle East (EAME), North America and South America. The company's Scent & Care division achieved Q3 sales of €172.1m, and nine month sales of 521.8m - 8 and 6 per cent increases respectively. Linzback said it "managed to obtain business with customers that had only been accessible… with great difficulty in the past, if at all."​ No details were given on the identify of these customers or the reason for the breakthrough. But he claimed that, by sales growth and profitability, the division is "now one of the leading players in this industry".​ In the most recently reported quarter the Scent & Care rolled out a new product called SymoMollinent, which is described as a "new and innovative cosmetic active ingredient for which a patent application has been filed".​ On July 31 Symrise acquired the remaining shares of Aromatics, a French-Madagascan supplier of natural raw materials such as vanilla, cocoa, coffee, botanical extracts and seafood. The acquisition brings Symrise closer to the source, allowing it to anticipate harvest trends, ensure sustainability and better quality control, allow it to try different technologies and check the vanilla production is in compliance with its own business ethics. The move is expected to extend Symrise's international natural extracts activities. Symrise also acquired Unilever's UK food ingredients business at the end of August, which is expected to give its savoury flavours portfolio a boost. Although like most companies, Symrise has been hit by increasing prices of some of its key raw materials, it says it has managed to reduce its overall costs as a percentage of sales revenue by imposing strict controls. Cost of sales in Q3 was €182.8m, 55.6 per cent of sales revenue. In Q3 2006 the cost of sales was 57 per cent of sales revenue. Leffingwell and Associates ranked Symrise number four in the global flavours and fragrance charts in 2006.

Related topics: Market Trends, Flavours and colours

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