Symrise Achieves Sales Increase and Gains Market Share at Ongoing High Profitability
07 Aug 2013 --- Symrise AG further increased its pace in the second quarter and notably strengthened sales and earnings in the first half of 2013. The Group grew in both divisions and across all regions and increased sales to €934.7 million (H1 2012: €871.6 million).
This corresponds to an increase of 9.5% at local currency. Earnings before interest, tax, depreciation and amortization (EBITDA) rose to €191.2 million. With an EBITDA margin of 20.5%, Symrise once again achieved a high profitability level despite continuing investments in capacity and personnel expansions.
Dr. Heinz-Jürgen Bertram, CEO of Symrise AG: “Symrise also substantially grew in the second quarter – achieving strong figures in both the emerging and developed markets. With an increase of 14% at local currency, North America was the region posting the strongest sales growth. EAME, which was impacted last year, saw a good recovery and also achieved solid sales growth. In our operations, we continued at full speed: We introduced a number of new cosmetic ingredients and consolidated our powder mixing operations for flavor manufacturing under one roof at our headquarters in Holzminden; we also brought additional capacities into operations. After a robust start in the first half, we are entering into the second half of our anniversary year from a strong position. We will continue to implement our business expansion plans, adding new and innovative product solutions to our portfolio. In addition, we will enhance our position in both, industrialized nations and Emerging Markets.”
In the first half of 2013, Symrise increased sales by 7.2% in the reporting currency to €934.7 million (H1 2012: €871.6 million). At local currency, sales were up by 9.5%. Every region and both divisions contributed to this result. North America posted the strongest growth with sales up by 13% (14% at local currency) in the first half. The second largest gains were made in Asia/Pacific, with a sales increase of 10% (13% at local currency). Compared to the previous year, notably improved figures were recorded in EAME: the region achieved a pleasing sales growth of 5% (6% at local currency) thanks to especially good dynamics in Eastern Europe. As expected, Latin America developed modestly compared to its above-average growth in previous years, realizing a sales growth of 3% (10% at local currency).
Symrise’s profitability especially benefited from the company’s robust sales in the first half of 2013. A slight relaxation in the prices for chemical raw materials also had a positive impact. By contrast, expenses increased for the continued expansion of capacities in sales as well as in research and development. In fact, R&D expenses saw the strongest increase and grew by 13% year on year due to the full project pipeline. Nonetheless, earnings before interest, tax, depreciation and amortization (EBITDA) rose by 11% at local currency to €191.2 million (H1 2012: €174.0 million). Symrise therefore remained highly profitable, achieving an EBITDA margin of 20.5%.
Net income for the reporting period rose by 12% to €93.4 million (H1 2012: €83.5 million). Earnings per share correspondingly increased to €0.79 after €0.71 in the first half of 2012.
Cash flow from operating activities increased by 23% to €77.0 million (H1 2012: €62.5 million). This was mainly due to the strong increase in sales and solid earnings in the first half. The ratio of net debt including pension provisions to EBITDA amounted to 2.5 as of June 30, 2013; despite the dividend distribution totaling €77 million the ratio thus only slightly changed compared to the level of the year end 2012 (Dec. 31, 2012: 2.4).
As part of its strategy, which aims at profitable growth, Symrise continues to advance its activities in the Emerging Markets. Symrise grew sales by 12% at local currency in these rapidly expanding markets, thereby exceeding the Group’s overall growth rate. The Emerging Markets’ share of total sales rose to 48% (H1 2012: 47%).
Flavor & Nutrition increased sales by 4% to €444.4 million (H1 2012: €427.2 million). At local currency, this corresponds to a growth of 7%.
Applications for culinary products and snacks as well as Consumer Health particularly benefited from high demand. The strongest growth was recorded in Latin America with a sales increase of 13% at local currency. The second-strongest region was Asia/Pacific, which posted 9% growth at local currency. In North America, sales were up by respectable 8% at local currency, despite high figures from the previous year. The EAME region continued its positive developments from the first quarter and increased sales by 4% at local currency. Ample demand in emerging markets of Eastern Europe as well as in the established Western European markets contributed to the good growth. To the contrary, demand was weaker in Southern European countries.
Flavor & Nutrition generated an EBITDA of €92.8 million (H1 2012: €93.0 million). Despite sustained high prices for natural raw materials and additional investments relating to new customer and research projects, EBITDA remained in line with the previous year. The EBITDA margin of 20.9% (H1 2012: 21.8%) was slightly higher than the Group’s figure.
Overall, Symrise expects robust demand to continue in the second half of 2013. Apart from some regional markets, the Group also expects good dynamics across all regions. Symrise therefore confirms its goal for 2013 to once again notably exceed growth of the global market for fragrances and flavors, which is estimated to be between 2% and 3%. Additionally, Symrise continues to work systematically towards its medium-term targets set for the 2020 fiscal year. According to these, the Group wants to achieve an annual sales growth (CAGR) of between 5% and 7% with an EBITDA margin between 19% and 22%.
