Symrise Profits Almost Double in Q1
Flavor & Nutrition got off to a successful start in the 2010 financial year. The division benefited from the recovery of global markets and posted above-average growth in the application areas Beverages and Sweet.
4 May 2010 --- Symrise AG has significantly increased sales and earnings in the first quarter of 2010. In an improving market environment the company saw sales al local currency grow 13.2%, or 12.8% at actual rates. Symrise grew across all divisions and regions, profiting from a robust rise in demand as well as the increasing normalization of order patterns and stock-keeping on the part of many customers. Group EBITDA rose by 42% to € 83.3 million. At 21.3% the EBITDA margin significantly exceeded the level of the first quarter of the previous year. The positive sales development as well as the effects of the restructuring measures implemented in 2009 contributed considerably to the improvement in earnings.
Dr. Heinz-Jürgen Bertram, Chief Executive Officer of Symrise AG, said: “The clearly visible recovery of the market during the second half of 2009 continued into the first quarter. Symrise took advantage of the noticeable increase in customer demand to get off to a successful start in the 2010 financial year. The strong position we enjoy with respect to major customers and robustly growing emerging markets is again reflected in our above-average rate of growth. We are also pleased about the very positive development of markets in both Western and Eastern Europe. The sharp jump in earnings confirms that our company is in excellent shape.”
With respect to the coming quarters Bertram added: “The development of business during the first quarter makes us confident that we will be able to meet our objectives for the current financial year. We want to continue to grow faster than the market as a whole and achieve an EBITDA margin of more than 20%. Our strategic focus will be on the further enhancement of our unique profile in the business units Care and Nutrition.”
In the first quarter Symrise saw Group sales at local currency grow by 13.2% to € 392.5 million (previous year: € 346.7 million) and by 12.8% at actual rates. The growth rate of 15.4% at local currency in emerging markets again exceeded the figure for the Group as a whole. The share of total sales generated in emerging markets thus rose one percentage point to 44%. Symrise also benefited from a recovery of the mature markets, namely Western Europe and the USA.
The strongest growth in sales of 18% (17% at local currency) was posted in the Asia/Pacific region. The EAME region, which was the hardest hit by the economic crisis in 2009, showed noticeable signs of recovery in the first quarter. Sales rose 15% (14% at local currency). The North American market also experienced positive effects from the improved market conditions and increased sales by 6% and by a strong 13% at local currency. Latin America was less affected by the economic crisis in 2009. Here sales rose 7% (4% at local currency) in the first quarter over the already high figures for the previous year.
Sales with the ten largest customers rose 13% at local currency. Symrise thus generated 30% of Group sales with this strategically important customer group. Business with major customers in the Flavor & Nutrition division developed es-pecially dynamic and sales for this customer group rose 18% at local currency. In the Scent & Care division the 10% increase of sales with the ten largest customers was mainly due to the recovery in the application areas Fine Fragrance and the luxury segment of Personal Care. Both divisions continue to enjoy a strong position on core lists and were able to win additional projects in the first quarter.
The robust sales increases in all regions and business units, combined with the effects of the restructuring measures implemented in 2009, contributed significantly to the earnings development of Symrise in the first quarter. A decline in the prices for raw materials in certain areas, as well as strict cost management throughout the Group also had a noticeably positive effect.
Earnings before interest, taxes and depreciation (EBITDA) rose in the first quarter by 42% to € 83.3 million. The EBITDA margin of 21.3% was clearly higher than the figure for the first quarter of the previous year (16.9%). Net income for the period nearly doubled from € 20.9 million to € 40.4 million. This corresponds to earnings per share of € 0.34 following € 0.18 for the previous year.
Operating cash flow in the first quarter was € 17.6 million (previous year: € 45.0 million) and reflects the increase in working capital resulting from the sharp growth in sales. Symrise continues to have a solid financial basis. Net debt (incl. pension provisions) amounted to € 786 million (31 Dec. 2009: € 773 million) at the end of the first quarter. Symrise reduced the ratio of net debt incl. pension provisions to EBITDA from 3.1 at the end of 2009 to 2.9 as of March 31, 2010.
Flavor & Nutrition got off to a successful start in the 2010 financial year. The division benefited from the recovery of global markets and posted above-average growth in the application areas Beverages and Sweet. Sales rose 22% at local currency in the Asia/Pacific region. In North America major customers were primarily responsible for the growth in sales of 16%. The regions EAME and Latin America posted strong single-digit growth rates.
The application area Consumer Health, which was launched in the fourth quarter and specializes in functional ingredients for food substitutes as well as flavor solutions for pharmaceutical products, developed well and increased sales by 26% at local currency.
During the reporting period Flavor & Nutrition saw sales rise 12% (12% at local currency) to € 186.2 million (previous year: € 166.9 million) with an increase in EBITDA from € 31.8 million to € 42.2 million. The EBITDA margin rose to 22.7% (previous year: 19.0%).
