Symrise Reports Strong Sales Rises in 2010, Cautious on Commodity Unpredictability

Symrise increased sales by 15.4% to € 1.57 billion and exceeded its target to achieve sales growth of at least 8%. The EBITDA margin rose to 21.1% and bet the aspired mark of more than 20%.

3/9/2011 --- Symrise AG has exceeded its sales and earnings goals for Fiscal Year 2010. The Group benefited from the global economic recovery and strong boost in demand, as well as the excellent positioning in emerging markets and in the business with large customers. Symrise increased sales by 15.4% to € 1.57 billion and exceeded its target to achieve sales growth of at least 8%. The EBITDA margin rose to 21.1% and bet the aspired mark of more than 20%. On another positive note, Symrise succeeded in further reducing its net debt thanks to operating cash flow being at a high level again.

“We capitalized on the strong tailwind of the economic recovery and ran our utilization at very high levels the whole year round,” said Symrise AG Chief Executive Officer, Dr. Heinz-Jürgen Bertram. “Besides continued strong growth in emerging markets, we benefited from a strong revival in demand in Western Europe and other established markets. This resulted in record growth of over 15%, with double-digit sales increases in all regions and in both divisions. With an EBITDA margin of 21.1% we have operated on a very profitable basis. We would like our shareholders to participate in this success and are proposing a 20% dividend increase to € 0.60 per share.”

“In Fiscal Year 2010 we systematically continued to implement our proven strategy: Our innovative business units such as Life Essentials and Consumer Health launched new products which pick up on consumers’ needs for a balanced diet and healthy lifestyle. Our traditional flavor & fragrance business has been extended by significant investments, including a two-fold increase in our menthol production capacity. In 2011 we will continue to focus on sharpening our specific profile.”

With a view to 2011, Heinz-Jürgen Bertram continued: “We’re optimistic about the current financial year and have set ourselves the goals of again outperforming market growth and winning market shares. At the same time, we do remain realistic: Following the outstanding year 2010 which was also driven by economic backlogs we are expecting more moderate growth for 2011. In this context the course of the crisis in the Middle East plays a role; another determining factor will be the oil price development which is difficult to predict and its influence on consumer behavior. At the same time we expect raw material prices to be one of the main challenges which we will keep a close eye on. Since this already became apparent in the middle of 2010, we implemented initiatives at an early stage: we expanded our backward integration of our supply chain, entered price negotiations with our customers and continued our consequent cost discipline. We are therefore sticking to our aspiration of permanently being one of the most profitable companies of our sector, and working on the basis of a sustained EBITDA margin of above 20%.”

The Flavor & Nutrition division grew positively in all application areas. Sales rose 13% (10% at local currency) to € 767 million (2009: € 680 million). Growth was particularly driven by high demand in the beverage area, as well as by business with Top 10 customers.

Business was most dynamic in Latin America, where Flavor & Nutrition sales rose 15% at local currency. Growth was also strong in Asia/Pacific and EAME, both of which reported 10% sales growth at local currency. In Asia/Pacific, Symrise’s global initiative “Naturally Citrus” provided for strong growth, especially in its beverages applications. Growth in the EAME region was driven by the established Western European markets as well as by Eastern Europe and the Gulf region. High demand in Russia confirmed Symrise’s decision to expand its footprint in this market. Symrise had acquired an existing facility from the Russian Aromaros-M group at the beginning of 2010, which it subsequently expanded and took into operation in December. In North America, Flavor & Nutrition sales grew 7% at local currency. In doing so, the business benefited particularly from activities with major customers which were further expanded by a new core listing in June.

Flavor & Nutrition EBITDA rose 25% to € 170 million (2009: € 137 million). With the EBITDA margin increasing to 22.2% (2009: 20.1%) the division was able to improve its already high profitability further.

In terms of outlook, the company reported the following, “We are convinced of our strategy: The focus on our strong position in Emerging Markets, our innovative business units Life Essentials and Consumer Care, as well as the expansion of our business with major customers have been the basis of our success in 2010 and will support our successful development in 2011. For the current financial year, Symrise is confident that both divisions, Scent & Care and Flavor & Nutrition, will both outperform the overall market for flavors and fragrances and expand their market share. The Group aims at increasing sales by 3 to 5% at local currency and is projecting an EBITDA margin of more than 20% for 2011.”