Symrise celebrates recession resilience
The flavour and fragrance firm reported actual sales growth of 3.2 per cent to €1.36bn (2.7 per cent in local currencies), and a slight increase in EBITDA to €265.4m.
While Europe, Africa and the Middle East had a slow start to the year, as customers in both flavours and fragrances de-stocked to protect the effects of the recession on their own margins, in H2 sales picked up in both divisions.
The real star, however, was South America, where overall sales grew by 12 per cent (17 per cent in local currencies). For Flavours and Nutrition, the sales increase was 21 per cent in local currencies. As for Scent and Care, even fine fragrances – traditionally the biggest casualty for a fragrance manufacturer in a recession – reported growth.
In North America, recent acquisitions drove sales in both divisions towards 14 per cent growth (12 in local currencies). These include the acquisition of Chr Hansen’s flavourings business in 2008, which is largely US focused, and Intercontinental Fragrances and Manheimer fragrances the same year.
Symrise also entered into a business alliance with First Choice Ingredients, securing its supply of raw dairy products so it can expand its natural dairy flavor portfolio in the US.
More recently, in late 2009 it acquired the Future Labs Group, located in Egypt and the United Arab Emirates, in a bid to better serve customers in the Gulf region and the Middle East.
In Europe, the company took a bold step outside of its traditional remit to form a Consumer Health business late last year, with the plan of tackling the high-potential functional ingredients market and flavours for pharmaceuticals.
CEO De Heinz-Juergen Bertram said the results demonstrate Symrise’s “resilience during the deepest recession in decades”.
He said they were achieved by focusing on large global customers, emerging markets and innovation – as well as shifting operations and making operations as lean as can be.
Bertram is expecting EBITDA margin in the coming year of at least 20 per cent, and on-going above-market growth. Nonetheless, he was cautious about what challenges may still lay in store.
“The market environment has improved in recent months, but continuously high raw material prices and the low level of consumer confidence still constitute challenges,” he said.