Diana Lifts Bottom Line at Symrise
10 Mar 2015 --- Hot on the heels of the announcement that chief financial officer Bernd Hirsch is to leave Symrise at the end of 2015, the ingredients company has posted full-year results that exceed the company’s targets, it said.
Full year group sales increased by 18% at local currency to €2,120.1 million (2013: € 1,830.4 million). Earnings before interest, taxes, depreciation and amortization as normalized for one-time effects from the acquisition and integration of Diana (EBITDAN) increased by 24 % to € 464.5 million (2013: € 373.1 million). With an EBITDAN margin of 21.9 % (2013: 20.4 %), Symrise ranks again among the most profitable companies in the industry.
Last summer Symrise bought the French flavours and ingredients firm Diana for an estimated €1.3bn, pushing it into the number three spot on the global flavours market.
In the fiscal year 2014, Symrise exceeded its targets and substantially expanded its market position. The group benefited from good demand in all regions and in both segments as well as from a particularly strong performance in the fourth quarter. In addition, with the acquisition of the Diana Group in July 2014, Symrise succeeded in entering the baby food and pet food markets and was able to expand its portfolio of natural ingredients.
Chief executive Dr. Heinz-Jürgen Bertram, said: "2014 was a very successful year for Symrise. We considerably expanded our market position in Mature and Emerging Markets and significantly broadened our portfolio of natural ingredients through the acquisition of Diana. But, most importantly, we once more created value and substantially increased sales, earnings and profitability. As a result, we are in an excellent position, both strategically and financially, to continue our profitable growth in 2015 and to outperform the market again."
In fiscal year 2014, Symrise topped the €2bn mark in sales for the first time, with a 16 % increase in reporting currency to € 2,120.1 million (2013: € 1,830.4 million). At local currency, this amounts to 18% sales growth. Symrise grew its sales in all regions and in both segments. The fourth-quarter performance was particularly strong, with a 35% increase in Group sales to € 590.1 million (2013: € 429.2 million) at local currency; 37 % in reporting currency.
The strongest region in terms of sales growth in fiscal year 2014 was again Latin America, followed by EAME, with sales increases of 27 % and 21 %, respectively (both at local currency). The third-strongest region, with a gain of 17 % at local currency was North America, followed by the Asia/Pacific region, where sales grew by 10 %.
The acquisition of Diana group was a turning point for Symrise. Excluding Diana, the Flavor & Nutrition segment increased its sales by about 6 %. At local currency, this represents sales of € 905.8 million (2013: € 869.9 million). In the reporting currency, sales were up by 4 %.
A spokesman for Symrise told FoodIngredientsFirst: "The Diana acquisition is the perfect strategic fit for Symrise. We are benefitting from it in many various ways. It will definitely help us in achieving our 2020 goals: a compound annual growth rate (CAGR) of 5-7% annually, with an EBITDA margin of 19-22% and a sales share within the emerging markets of over 50%.
He continued: "The business areas of Diana complement those of Symrise ideally. We are opening new markets and customers for Symrise and Diana. We are also adding expertise in pet food, baby food and nutrition. They offer good growth potential.
"Further, we will considerably strengthen our backward integration in key natural raw materials. Diana is particularly strong in banana and carrots and many other naturals," he concluded.
Since July 2014, the sales and earnings contributions of the Diana Group have been consolidated in the segment’s results. Including Diana, Flavor & Nutrition increased its sales by 34 % at local currency to € 1,139.7 million (2013: € 869.9 million). In the reporting currency, this represents an increase of about 31 %.Diana Group contributed sales of € 233.9 million.
For the months from July through December, Diana Group contributed an EBITDA of € 48.8 million. The segment’s normalized EBITDA rose to € 241.6 million (2013: € 178.6 million) whilst its normalized EBITDA margin amounted to 21.2 % (2013: 20.5 %).
In the current fiscal year, the Group expects to benefit from solid customer demand and high capacity utilization in both segments as well as in Mature and Emerging Markets. Prices of raw materials will continue to influence the cost development in 2015. Although the costs of chemical commodities were down at the end of 2014, prices of various agricultural raw materials showed significant increases. Consequently, Symrise expects continued volatility in raw material prices as well as certain currencies. According to estimates, the global market for fragrances and flavors is growing at 2 % to 3 % per year. For 2015, Symrise remains committed to its goal of growing faster than the market and achieving an EBITDA margin of more than 20 % for the Group.
In addition, Symrise confirms the objectives defined for the fiscal year 2020, namely a compound annual growth rate (CAGR) of 5 to 7 % and an EBITDA margin in the range of 19 % to 22 %.
By Kelly Worgan
