Symrise continues accelerated pace in Q3, reports sales increase of 6.5 percent
09 Nov 2017 --- Symrise AG has accelerated its growth course in Q3, achieving overall a considerable increase in sales and earnings for the nine-month period. This positive trend was driven by strong demand across all segments. Symrise increased its sales organically by 6.5 percent in the first nine months of the year. Organic growth was particularly dynamic in the third quarter with a plus of 9.1 percent.
Taking into account portfolio and exchange rate effects, sales in the first nine months of the year were up 3.9 percent to €2,278.4 million (US$264.1 million) (9M 2016: €2,192.3 million (US$2541.8 million)). Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to €485.2 million (US$562.5 million) (EBITDAN 9M 2016: €480.3 million (USR4556.8 million)). With an EBITDA margin of 21.3 percent, profitability remained high (EBITDAN margin 9M 2016: 21.9 percent).
“We continued our growth initiatives in the third quarter, which led to a successfully expanded market position,” said Dr. Heinz-Jürgen Bertram, CEO of Symrise AG. “We consider the strong sales growth as a result of our unique positioning. The targeted investments in the product portfolio, research and development and new markets support our strategy. We are confidently looking ahead to the remaining weeks of the year. Our guidance for 2017 remains in place and we also confirm our long-term targets. We are committed to continue as one of the fastest-growing companies in the industry and to operate highly profitable.”
Continued strong sales growth
Symrise achieved strong organic sales growth of 6.5 percent in the period from January to September, including a 9.1 percent increase in the third quarter. Considering portfolio effects – namely the sale of the industrial activities of Pinova in December 2016 and the Nutraceutix and Cobell acquisitions – as well as exchange rate effects sales were up 3.9 percent to €2,278.4 million (US$2651.5 million) (9M 2016: €2,192.3 million (US$2542 million)). Third quarter sales were impacted by an unfavorable exchange rate environment, especially the devaluation of the US dollar against the euro.
Profitability remains high with an EBITDA margin of 21.3 percent.
Symrise continued to operate highly profitable in the first nine months of the year. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 1.0 percent to €485.2 million (US$562.5 million) (EBITDAN 9M 2016: €480.3 million (US$556.8 million)). The Group's EBITDA margin was a very satisfactory 21.3 percent and was thus within the targeted mid-term corridor of 19 to 22 percent (EBITDAN margin 9M 2016: 21.9 percent).
Flavor benefits from new business and strong demand
The Flavor segment, which includes taste applications, achieved organic growth of 10.0 percent in the first nine months. In the third quarter, it even reached 12.7 percent growth. Considering exchange rate effects and the Cobell acquisition, the segment reported a sales plus of 8.6 percent to €842.6 million (US$976.9) (9M 2016: €775.9 million (US$899.6)).
EBITDA in the Flavor segment amounted to €183.4 million (US$212.5 million) in the first nine months. This equals a plus of €3.8 million or 2.1 percent compared to the prior-year period (9M 2016: €179.6 million (US$208.2 million)). The EBITDA margin, at 21.8 percent, was slightly lower (9M 2016: 23.1 percent), mainly due to higher research and development expenditures and the consolidation of Cobell as of 1 July 2017.
Nutrition again with strong gains in pet food
The Nutrition segment, which includes the Diana division with applications for food, pet food and baby food as well as probiotics, achieved an organic growth of 7.8 percent in the first nine months. In the third quarter, organic sales growth amounted to 5.8 percent. Considering portfolio and exchange rate effects, the segment had a 13.5 percent increase in sales in the first nine months to €475.7 million (US$551.5 million) (9M 2016: €419.2 million (US$486 million)).
The strongest contributions came from the Pet Food business unit, which posted high single-digit or even double-digit local currency sales increases in all four regions. The Food applications area also performed well and achieved significant sales increases, showing particularly expansive trends in the Latin America and Asia/Pacific regions.
In the Probiotics business unit, sales also increased substantially through the acquisition of the US company Nutraceutix. Adjusted for the acquisition effect, the business unit showed a high single-digit increase in sales after the first nine months. Due to a temporary destocking by a major customer, growth was lower in the third quarter.
Symrise reinforces targets for 2017
Symrise confirms its growth and profitability targets for the current fiscal year. The Group foresees to significantly outperform the relevant market in 2017, which is projected to grow at a rate of about 3 percent. The company aims to operate highly profitable and achieve an EBITDA margin of over 20 percent in 2017.
The medium-term targets set through to the end of the fiscal year 2020 remain fully intact, including a compound annual growth rate (CAGR) in the 5-7 percent range and an EBITDA margin between 19 and 22 percent.
