9 Aug 2012 --- Symrise AG benefited from a further rising demand in both segments during the second quarter of 2012. The Group thus increased sales by 7% in the first half of the year, to € 872 million (H1 2011: € 812 million). The dynamics in Emerging Markets, especially Latin America, as well as positive developments in North America played a particular role. Business with global key customers was also a source of positive momentum. EBITDA increased by 7% to € 174.0 million (H1 2011: € 162.5 million) despite ongoing high raw material costs.
Dr. Heinz-Jürgen Bertram, CEO of Symrise AG, commented: “We continued to gain momentum in the second quarter and benefited from a considerable rise in demand in both, the Emerging Markets and established markets. Once again, Symrise achieved an EBITDA margin of 20%. This is a notable achievement considering the impacts from high raw material and energy prices as well as ramp-up costs for our new menthol plant. Although many questions remain surrounding the development of the eurozone, we expect further growth in the second half of the year. We are well-positioned internationally and enjoy a broad customer base. Additional growth is expected from our new menthol production plant which has been operating since the end of June. We therefore confirm our raised outlook from May and are aiming for sales growth at local currency between 3% and 5% for the full year.”
Symrise generated sales of € 871.6 million in the first half of 2012 (H1 2011: € 811.8 million). This represents an increase of 7% (4% at local currency). This development was particularly driven by the second quarter when the Group boosted sales by 11% to € 438.9 million (Q2 2011: € 395.0 million).
North America performed especially well in the first half with sales up 19% (10% at local currency). Latin America also posted disproportionately positive growth with a sales increase of 18% (18% at local currency). Sales in the Asia/Pacific region were up 11% (4% at local currency) while sales remained stable in the EAME region despite economic uncertainties in Southern European markets.
Symrise improved its earnings before interest, tax and depreciation (EBITDA) by 7% in the first half to € 174 million (H1 2011: € 163 million). The cost situation remained characterized by persistently high raw material and energy costs. Ramp-up costs for the expansion of Symrise’s menthol capacities in Holzminden also had an effect in the first half. Despite these costs, the Group managed to achieve an EBITDA margin of 20% (H1 2011: 20%) and kept profitability at a sustainable high level.
Net income for the period rose by 8% to € 84 million (H1 2011: € 77 million). Earnings per share increased by 6 cents to € 0.71 after € 0.65 last year.
Cash flow from operating activities amounted to € 63 million, substantially higher than in the previous year (H1 2011: € 34 million). The company has the necessary liquidity and financial strength to fully implement the Group’s strategy. The ratio of net debt incl. pension provisions to EBITDA remained, despite the distribution of dividends for 2011, nearly constant with last year’s period at 2.3.
The Group’s strong position in Emerging Markets led to an increase in sales for these regions of 8% at local currency. Thus, Symrise is growing nearly twice as fast in Emerging Markets than the Group as a whole. The Emerging Markets in Latin America were substantial growth drivers along with those in Eastern Europe, Russia and the Middle East. Latin America also benefited from growth initiatives implemented there. The share of Group sales generated in the Emerging Markets increased to 47% in the first half after amounting to 46% in the first half of 2011.
Symrise has a balanced portfolio of local, regional and global customers. The first half of 2012 continued to deliver especially positive results in business with internationally active key customers. Sales with this customer group increased 11% at local currency and therefore exceeded the overall growth of the Group. Business with top 10 customers was especially strong in the Scent & Care division with an increase of 13% at local currency. Sales with major customers rose 8% at local currency in the Flavor & Nutrition division. Symrise generated 32% of its overall sales with international key customers in the first half (H1 2011: 30%).
Flavor & Nutrition increased sales by 6% in the first half to € 427 million (H1 2011: € 402 million). At local currency, this corresponded to an increase of 3%. The division benefited particularly from its activities in the Emerging Markets, favorable core-list positions and from additional new business gained with regional and international customers.
Flavor & Nutrition achieved the strongest growth in North America with sales up 12%. Every application area contributed to this positive development, with sales increases in the high single-digit and double-digit ranges. Sales were up 3% at local currency in the EAME region. The main growth driver was Russia with a double-digit growth rate, while the sovereign debt crisis continued to have a notable effect on Western European markets. Sales growth was restrained in the Asia/Pacific region, up 1%. In Latin America, Flavor & Nutrition increased its sales by 2% at local currency.
Flavor & Nutrition improved its EBITDA by 9% in the first half to € 93 million (H1 2011: € 86 million). The EBITDA margin remained at an excellent level with 21.8% compared to 21.3% in the prior-year period.
Symrise remains confident of a good second half despite continuing uncertainties surrounding the European sovereign debt crisis. The Group has a balanced business: it is geographically well positioned and operates with two nearly identically sized divisions; in addition it has a broad customer base. Following the positive developments of the first half of 2012, Symrise confirms its increased outlook from May and continues to aim for sales growth between 3% and 5%. Further growth is expected in both Emerging Markets as well as industrialized nations although in Western Europe this is expected to be reserved due to the sovereign debt crisis. Symrise also continues to focus on its approach to realize sustainable, profitable growth and aims to achieve an EBITDA margin of about 20%, despite persistently high raw material and energy prices.