Symrise showing strong growth despite key fragrance ingredients shortages
The fragrance and flavours player says it enjoyed accelerated growth of 10.6% in the second quarter, seeing profitability at good level with an EBITDA margin of 20.1%.
On the back of these results, the company is raising its sales forecast for the current fiscal year: it says it expects organic growth above its medium-term target corridor of 5 to 7%, and will therefore “significantly exceed” market growth.
Scent and Care: fragrance in focus
In a challenging environment, the Scent & Care segment achieved strong organic growth of 10.1 % in the first half of the year, Symrise says.
“In this continuing tense situation of the raw material markets, especially with the supply of important aromatic substances, the segment sustained the dynamic development from the previous quarter and grew by 13.6 % between April and June,” the company explains.
“Taking into account negative exchange rate effects and the portfolio effect from the acquisition of Citratus, the segment increased sales by 3.4 % to € 660.1 million (H1 2017: € 638.2 million).”
Driven by cosmetics and aromas
Growth was driven by the Cosmetic Ingredients and Aroma Molecules divisions, Symrise notes.
“Each posted organic double-digit sales growth rates. The Fragrance business also developed positively and achieved a good single-digit growth rate,” according to the company.
This was despite the second quarter being marked by failure to deliver raw materials of some suppliers and an overall rise in price level.
“Scent & Care again benefited from its comprehensive backward integration in fragrances – recently strengthened by the acquisition of Pinova in 2016 – and its mostly own broad raw material base,” explains Symrise.
“As in the previous quarter, Symrise was therefore fully capable of delivering to its clients. To compensate for the increased raw material costs, the company is in close dialogue with its customers to actively implement price increases.”
