Symrise reports double-digit organic growth in F&B division amid tense economic environment
02 Aug 2023 --- Symrise achieved a sales increase of 6.8% to €2.4 billion (US$2.6 billion) in the first half of 2023. Company sales increased organically by 8%, and Taste, Nutrition & Health achieved organic sales growth of 11.4% in the first half of the year. The company notes positive development and sales growth in a tense global economic environment.
“Symrise has a proven and stable business model with comparatively low-risk content. The Group is broadly diversified and robustly positioned. However, persistent inflation has resulted in cost increases,” explains Dr. Heinz-Jürgen Bertram, CEO of Symrise.
The company has been able to partially offset until now through strict cost management and price increases.
“Nevertheless, we are confidently starting the second half of the year. By expanding our production capacities and collaborating with Sunner in China and with Swedencare, we are reinforcing our leadership position in the pet food and pet care businesses. These measures reflect our ambition to enhance our competitiveness sustainably,” notes Bertram.
Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to €446 million (US$489 million) compared to H1 of 2022 that reported €486 million (US$533 million). The group’s EBITDA margin was 18.5% compared to 21.5% in H1 2022.
Sweet and savory on the rise
Taste, Nutrition & Health achieved organic sales growth of 11.4% in the first half of 2023. The segment’s sales amounted to €1.5 billion (US$1.6 billion) in the reporting currency and were 9.3% above the previous year’s figure.
In the F&B division, demand for sweet and savory products and beverage flavorings developed very satisfactorily to deliver double-digit organic growth. Strong growth was recorded in EMEA (Europe, Middle East and Africa) and Latin America regions. Business unit Naturals increased sales, particularly in the APAC and Latin America regions.
In the F&B division, demand for sweet and savory products and beverage flavorings developed “very satisfactorily” to deliver double-digit organic growth.The Pet Food division likewise posted double-digit percentage growth. Sales development was particularly dynamic in France, wathe US, Mexico, China and Southeast Asia.
Further, the probiotics business remained below the previous year’s level and recorded a slight decline in sales in the first half of the year. This was mainly attributable to weaker demand in North America and EMEA regions.
Group and segment profitability
In the reporting period, EBITDA of the Taste, Nutrition & Health segment amounted to €335 million (US$367 million), which was 6.4% above the previous year’s level.
The increase was mainly attributable to profitable sales growth, acquisitions and a slight raw material cost ratio decline. The EBITDA margin reached 21.9%, which, normalized for the one-time gain in the previous year from the sale of the Velcorin business, was 0.7 percentage points above the last year’s figure.
The consolidated net income attributable to the shareholders of Symrise for the first six months of 2023 amounted to €188 million (US$206 million), which was €41 million (US$45 million) lower than the previous year’s amount.
Symrise confirms mid-term targets
The company has confirmed its growth and profitability targets and continues to expect to grow faster than the relevant market. Symrise is targeting organic sales growth of between 5 and 7% in 2023.
Profitability, measured by the normalized EBITDA margin, is expected around 20%.
In the medium term, the company aims to increase its sales to €5.5 to €6 billion (US$6,044 to US$6,593 million) by 2025. Annual growth of 5 to 7% CAGR and targeted acquisitions are expected to contribute to this. The company notes that EBITDA margin should meet the target corridor of 20 to 23% in the mid-term.
Edited by Elizabeth Green
