Symrise reports rising out-of-home demand, H1 results boosted by Flavor & Nutrition
05 Aug 2021 --- In the first half of 2021, Symrise performed “outstandingly well.” As pandemic-related pressures eased, the company’s sales and earnings increased substantially. Product solutions for beverages and food also developed dynamically because falling case numbers for the coronavirus fueled out-of-home consumption, according to Symrise CEO, Dr. Heinz-Jürgen Bertram.
“Although the pandemic will persist, we are very confident for the coming months following the good first half of the year, and we are more confident about our performance in the future. We are therefore raising our forecast for the organic sales target, as well as for the profitability target,” he says.
Flavor & Nutrition segment
The combined Flavor & Nutrition segment increased its sales organically by 10.1 percent. Sales in the reporting currency increased to €1,159 million (US$1,372 million) and thereby significantly exceeded the prior-year figure (H1 2020: €1,110 million (US$1,314 million).
In Q2, the segment recorded gradual normalization of consumer behavior. The increase in out-of-home consumption exerted a positive effect on demand for beverage products. At the same time, the trend towards healthy cooking at home ensured strong growth.
Applications for beverages recorded very good organic sales growth in the double-digit percentage range, says Symrise.
Symrise continues to see itself as being reliably positioned despite the current challenging market environment.The biggest growth was generated in the US, China, Brazil as well as Germany, the UK and Ireland.
Meanwhile, sales in the Savory business unit primarily increased in the national markets of South Africa, Egypt, Mexico and Brazil. They made a significant contribution to exceeding the prior-year figures, which were already strong.
Sales for sweet product solutions remained constant at the prior-year level. The regions of Asia/Pacific and Latin America recorded significant sales growth, while the regions EAME (Europe, Africa, Middle East) and North America were unable to continue at the prior-year level.
Organic sales increased by 9.7 percent, says the German flavors supplier.
In the reporting currency, sales increased by 4.8 percent to €1.9 billion (US$2.2 billion). Earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 6.8 percent compared to the same period of the previous year. The EBITDA margin developed “particularly well,” with a value of 22 percent.
Net income for the period increased by 15.9 percent to €196 million (US$232 million). In light of good performances during the first half of the year, Symrise raised the forecast for the full year and is targeting organic sales growth of more than 7 percent (previously 5 to 7 percent) and an EBITDA margin of more than 21 percent (also previously around 21 percent).
The change in consumer behavior resulting from the pandemic is now normalizing, says Symrise.
In particular, demand for the applications for luxury products and product solutions for out-of-home consumption is rising again and supporting the group’s growth trajectory.
Strong growth in segments
Symrise achieved sales growth of 4.8 percent to €1.9 billion (US$2.2 billion) (H1 2020: €1.8 billion (US$2.1 billion)).
Alongside catch-up effects in the first quarter resulting from the cyber-attack in December, the dynamic in Q2 made a positive contribution. Due to the accelerating business and higher demand, sales increased organically between April and June by 8.8 percent.
The company is looking ahead “with confidence” to the second half of the year 2021 even though it is likely that the framework conditions imposed by the pandemic will remain unchanged.
Edited by Elizabeth Green
